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Construction recovery needs a VAT cut, says FMB


The Chancellor must use the upcoming Budget to slash the rate of VAT on repair and maintenance work, and to invest in the construction sector to maintain the industry’s recovery, according to the Federation of Master Builders (FMB).

The FMB has made the statement in response to the latest Office for National Statistics (ONS) construction output data, which shows construction output increased by 1.1% in the three months to November 2019 compared with the previous three-month period. This was driven mostly by 1.6% growth in new work, with a smaller contribution from 0.2% growth in repair and maintenance..

Brian Berry, Chief Executive of the FMB, said: “While 2019 was a year marked by political and economic uncertainty, there does seem to be some small signs of hope for the construction industry, with the largest monthly growth in the industry seen in November since the start of the year. It is too soon to tell whether this will be a longer term trend, as some sectors such as private house building and repair and maintenance continue to see sluggish growth.

“The upcoming Budget provides the perfect opportunity for the Government to help ensure this positive trend at the end of 2019 continues into the new decade. In order to help boost the industry, the Chancellor should prioritise cutting VAT on home improvement works, so that tax isn’t a barrier to homeowners upgrading the energy efficiency of their properties. The Government should also use the Budget as an opportunity invest in construction skills to help build the homes and infrastructure we need, and invest in planning departments to ensure the planning system doesn’t act as a blockage to the Government’s ambitious housing targets.”

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