VAT Tax Cut to Support UK Construction

Recent survey conducted by the Federation of Small Businesses (FSB) revealed that a cut in VAT tax can help support the Britain’s building industry. To be more precise, it should be noted that the survey results indicated that a 5% cut in the VAT tax can help small businesses cope with the recession. The FSB survey demonstrated that 59% of small firms, working in the construction sector, have experienced a fall in trade during the past 6 months, with 37% of respondents being concerned about their future financial situation. Also, 53% of those surveyed said that more clients were late with their payments for services. Almost 50% of the surveyed firms acknowledged that it was the lack of demand that has been negatively influencing their businesses. The key concern of the respondents was associated with a 15% VAT tax on renovation of a property, which, according to them, was preventing clients from using their services in building projects. The campaign, called “Get Britain Building” suggests that a cut in the VAT tax can significantly boost the UK construction industry. FSB national policy chairman, John Walker, claimed that consumer confidence in the sector of small building projects has dropped to a very low level, and that the Government should give financial incentives to people who planned an extension or a renovation of their homes. He believed that a cut in the VAT tax on renovation would encourage people to spend money, as well as it will give the Government an opportunity to meet its carbon emission targets. FSB experts added that the threat of the reduction of 300,000 job sites in the construction sector means that the industry desperately needs the governmental support these days. Another authoritative organization, the Federation of Master Builders (FMB) supported the campaign for a reduction in the VAT tax. Brian Berry, FMB director of external affairs said he is happy that the FSB has joined the tax reduction campaign; he also added that the FSB survey proves that the governmental measures are needed to increase the level of consumer confidence in the construction sector.