‘Lower VAT on property repairs could save jobs’
Thursday November 19, 2009
A VAT cut on property repairs could save thousands of jobs, a new report suggests.
According to a study conducted by Teesside University Business School on behalf of the Repairing Britain Campaign, reducing VAT on repairs to five per cent will minimise the black economy and allow a better use of existing building stock.
The report found that the cost to the government of reducing VAT on repairs would total £2.6 billion but demand for these services would go up by ten per cent.
If unemployment continues in the construction industry, there could be a skills shortage in the future and resultant inflationary wage rises as the recovery arrives, the study said.
Garvis Snook, chief executive of Rok plc and spokesperson for the Repairing Britain Campaign said: "We welcome the findings of this report which give validity to our arguments that a change in tax on property repairs could be cash neutral."
The Scottish Building Federation recently called on the government to reduce VAT for the industry to help stimulate business during the recession.