Politicians from across the UK this week called on the Government in Westminster to cut VAT to five per cent for all building repair and maintenance work.

In Westminster an Early Day Motion (EDM 7) tabled by Bob Russell MP received its one hundredth signature. EDM 7 calls on the Government to cut the VAT levied on building repair and maintenance work to five per cent, arguing that such a cut would not only eliminate the cowboy builder, but would also make it easier for people to make energy efficient improvements to their homes.

In a debate in the Welsh Assembly on housing strategy, Assembly Members united to support a motion that called on the Welsh Assembly Government to make representations to the UK Government to reduce the rate of VAT on building repairs and improvement work to existing buildings.


Richard Jenkins, Director of the Federation of Master Builders (FMB) in Wales said: "I am delighted that there is such strong support for a cut in VAT from within the Welsh Assembly. Rogue traders flourish by evading VAT and offering the customer a cheap deal as a result. Reducing the rate of VAT on domestic building work to five per cent would reduce significantly the commercial advantage of the VAT evading trader. The financial incentive to choose a rogue trader will diminish and a level playing field will emerge instead. In time, this will drive the rogue traders out of the market as customers focus on quality and value not just price."

Survey evidence suggests that over 50% of customers would employ a VAT dodging tradesman to cut their costs. The evasion of VAT on domestic building work is endemic and the informal economy is estimated at £4.5 billion, which suggests a VAT loss of around £780 million per year.The proper enforcement of the existing VAT law is not a viable option, as it would mean a VAT inspector in every home. Cutting the rate of VAT is the only way to ensure the eviction of rogue traders.

(CD/JM)