The Federation of Master Builders (FMB) is calling for the government to cut the VAT on home improvement work following official data from the ONS published on Friday. While there has been a rise in output over the first quarter of the year, construction output decreased month-on-month by 1.9% and the repair and maintenance series fell to its lowest level since December 2018, experiencing a fall of 3.1% compared to the previous month.
Brian Berry, chief executive of the FMB, said: “It’s not at all surprising that construction output has dropped at the end of the first quarter of this year, given the unprecedented political uncertainty we’ve been facing. To get us through these turbulent times, the government must be bold in its thinking when it comes to supporting the economy bucking any downward turn. One course of action would be to cut VAT on work in the home improvement and private domestic sectors from 20% to 5%”
Berry continued: “A cut in VAT would help stimulate demand from homeowners resulting in more work for the thousands of small to medium-sized construction companies which would help support local economies and increase training opportunities. This is all the more important given that the FMB’s own State of Trade Survey for Q1 2019 saw the first dip in workloads for small builders in six years.”
Berry concluded: “Cutting VAT would also be an important step to help encourage more retrofits of our existing buildings to make them more energy efficient and deliver a cut in carbon emissions.”
