Griffiths supports FMB plea for VAT reduction

Construction minister Nigel Griffiths has expressed support for the Federation of Master Builder's (FMB) campaign for a reduction in the rate of VAT to 5% on domestic refurbishment. 

Speaking at FMB Scotland’s annual conference today (Thursday), Griffiths advised the trade association to “keep up the pressure (on the Chancellor) and to keep the evidence coming.”

Griffiths highlighted Europe’s need to resolve VAT anomalies by the end of this year, with much of the work falling during the UK’s presidency of the European Union.

FMB’s director of external affairs, Andrew Large, said: “The UK presidency will focus the incoming government’s mind on financial issues, and we are hopeful they will be convinced of the benefits found by other European countries, of a lower rate of VAT on domestic refurbishment in the UK. 

"France implemented a 5.5% VAT rate on such work four years ago and saw a dramatic rise in domestic refurbishment work, as well a reduction in the informal economy.”

Answering a question on the Labour government’s view on the merits of refurbishment versus new build following the Barker review, Griffiths said: “I hope we have learned lessons from the demolition programmes of the 60s and 70s.”

Griffiths also outlined Labour initiatives to reduce the burden of red tape on small and medium sized businesses, which form the core of FMB’s membership. 

These include the introduction of a flat rate of VAT scheme; raising the audit threshold to the highest level permitted by the European Union; the availability of simplified tax forms to be completed on-line; and improving best practice for employment tribunals, which would stop “frivolous” cases coming to court.