Lowering VAT 'could boost home energy efficiency'
1st Feb 2012
A reduction in the rate of VAT on home improvements could encourage more people to increase the energy efficiency of their property, according to one sector body.
Andrew Leech, director at the National Home Improvement Council (NHIC), said he is "sure" this would be the case, as cutting VAT would save the consumer money and also means that they are more likely than currently to go to a builder who does charge VAT as opposed to a rogue trader who does not.
"I honestly think that VAT makes homeowners think twice about doing energy efficient improvement to the property because they have to pay through the nose for it," he explained.
Mr Leech said high VAT also reflects the fact that some people are going for cheaper solutions to the problem of providing efficient improvements, which might not last as long as more expensive alternatives.
"If you pay more for a job, then you get a better job done and it lasts longer - it will maybe last for the lifetime of a house," the expert suggested.
His argument was recently backed by Brian Berry, director of external affairs at the Federation of Master Builders, who said that the government should take action to reduce the amount of builders who take cash in hand payments.
He claimed that the coalition can reduce the competitive advantage of these rogue traders and help protect consumers by cutting VAT to five per cent for all home repair, maintenance and improvement work.
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