UK one step closer to VAT cut

The UK construction industry is one step closer to a reduction in VAT for refurbishment works, after Europe announced possible tax cuts.

The European Commission plans to allow member states to lower VAT rates for various services, including builders.

The 27 member states will be able to apply lower tax if the proposal is adopted, but it requires unanimous agreement to become law.

The Federation of Master Builders (FMB) said the decision was a victory for builders in the UK who want to see VAT cut from 17.5% to 5%.

Cut the VAT Coalition co-ordinator Richard Hyslop said: “The economic case for lower VAT rates for the repair and maintenance of existing buildings is clear.

“It is time the UK government listened not only to the European Commission, but also to the 72% of MPs who also want to see VAT cut.

“The time for excuses is over - the government must act now and cut this pernicious tax.”