Construction sector

Construction sector expects £15bn to be generated from a VAT cut on home improvements



A VAT reduction from 20% to 5% on home improvement works could generate £15bn in new taxes, according to business groups and organisations across the property and construction sector.

This coalition has today (2nd December) written to each of the leaders of Westminster’s four largest parties asking them to speak for the ‘Cut the VAT’ campaign during the remainder of the run-up to the general election and to meet with the alliance early in the next parliament.

Organisations including the Federation of Master Builders (FMB) and the British Property Federation revealed that the cut could create 95,000 new jobs and result in a rise in housing investment.

In addition, a reduction in VAT could have the potential to stimulate the economy and enable the UK’s transition to net zero carbon.

“Reducing the rate of VAT on all repairs, maintenance and management of residential property would support the greening and improvement of our housing stock and help the build-to-rent sector deliver more homes,” said Melanie Leech, chief executive at the British Property Federation.

Brian Berry, chief executive at the FMB, added: “The four main parties must go further in their policy pledges to promote and incentivise energy efficiency works.

“Given that homeowners tend to complete these tasks as a consequence of larger home improvement works, the rate of VAT on repair and maintenance work needs to be reduced from the current 20% to 5%.”


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