The Federation of Master Builders (FMB) has called for a reduction in the VAT rate for all types of renovations throughout the UK.
The call is to reduce VAT to 5 per cent and also update the building regulations to mandate more energy efficient properties.
Currently, a 20 per cent VAT rate applies to renovations, whereas a zero VAT rate applies to new builds.
A reduced 5 per cent VAT rate is currently available for contractor-led projects renovating a home that has been left unoccupied for at least two years. See an example here.
The industry body that represents builders also supports introducing a licence to trade for building firms. The FMB says a licencing scheme will increase consumer confidence and promote high quality construction.
In addition, an FMB membership survey recently showed that the crisis in the availability and cost of building materials has been compounded by a resurgent skills shortage, with 98 per cent of FMB members experiencing material price increases through the second quarter of 2021 and around 50 per cent struggling to recruit for key trades such as bricklaying and carpentry.
