FMB backs Plaid Cymru's plans to cut VAT on home renovations

Plaid Cymru’s proposal to cut VAT on home renovations could revitalise the Welsh construction sector, according to the Federation of Master Builders (FMB).

Last week, Westminster candidates Hywel Williams and Ieuan Wyn Jones made the case for reducing VAT in the construction sector to generate jobs and boost the Welsh economy.

Hywel Williams cited an independent report by Experian in 2015 showing a cut in VAT on home renovations would have resulted in 1,987 extra jobs in Wales by 2020 and had a stimulus effect of £47m in 2015.

“We have an old housing stock in Wales and renovation is a better option in so many ways – greener, more socially cohesive and less wasteful of resources,” Mr Williams added.

"An expensive new build, say for well-off people in the South East of England is VAT-free.

“A renovation of say a terraced house in Wales for a young couple on a low income is clobbered with 20% VAT.

“This anomaly is clearly unfair and hits Wales hard because of the nature of our housing stock.”

Ifan Glyn, director of FMB Cymru, said it welcomed the announcement that Plaid Cymru would press the UK Government to cut VAT on domestic refurbishment work.

“The economic benefits of a VAT cut would be significant and timely, given the uncertainty facing the country as it starts the process of departing the EU,” Mr Glyn stated.

“Far from depriving the treasury of revenue, experience from the Isle of Man suggests that the reduction could actually increase net revenues by boosting demand and cutting out the black market.”

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