Opinion Former Article

Countryside Alliance Budget sumbimission: The case for VAT reduction

The Countryside Alliance has, as a member of the Cut the Vat Coalition, been working to ensure that EU governments have the freedom to target VAT cuts in the way which will be of most benefit to their economies. We believe that reducing VAT from 17.5 per cent to 5 per cent for all maintenance and home improvement work would benefit millions of UK homeowners by helping those who cannot afford vital repairs to their homes, bring empty properties back into use and help the Government achieve its target of cutting carbon emissions by 60 per cent by 2050.

At the Ecofin Council on 10 March European Finance Ministers voted to allow EU Member States to charge VAT at 5 percent on home maintenance and repairs marking a big victory for the Cut the VAT coalition which has been campaigning to get the UK Government to cut VAT for all maintenance and repair work.

The news has been welcomed by organisations connected to the construction and property sectors as a way of helping their members survive the recession. At present eight building firms are going bust each day according to PricewaterhouseCoopers, and the Royal Institution of Chartered Surveyors (RICS) predicts that 300,000 construction jobs will be lost during the course of the recession. The news will also be welcomed by the record 4.5 million people on council house waiting lists. According to the Empty Homes Agency there are 940,000 properties which are sitting empty in the UK. A cut in VAT would provide a real opportunity to redevelop this housing stock and provide that much needed housing.

The EU experiment where VAT has already been cut in parts of Europe proves that a cut will increase Treasury revenues as well having many social benefits such as creating a greener, more energy efficient housing stock and tackling the growing issue of fuel poverty.

The EU Finance Ministers' decision followed an overwhelming vote in favour of VAT reduction in the European Parliament on 19 February. MEPs from all political parties voted in favour of reduced rates of VAT for building repair and maintenance work.

The Countryside Alliance, as part of the Cut the Vat Coalition, is calling on the Chancellor to use the Budget to implement this agreement in the UK; something which has so far been supported by the 125 Members of Parliament, from all parties, who have signed Early Day Motion 7, VAT ON REPAIRS AND MAINTENANCE TO EXISTING BUILDINGS.

Click here for the Budget sumbission of the Countryside Alliance and an accompanying briefing paper: Cut the VAT Coalition Case for VAT reduction.

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