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Buildings: VAT

Question for Treasury

UIN 134418, tabled on 8 January 2021

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of reducing the VAT rate on building refurbishment works to zero.

Answered on

13 January 2021

The Government already maintains a reduced rate of VAT at five per cent, subject to certain conditions, for residential renovations.

Introducing a zero rate of VAT would come at a significant cost to the Exchequer, estimated at about £4 billion per year, which would have to be balanced by a reduction in public spending, higher borrowing or increased taxation elsewhere. While the Government keeps all taxes under review, there are no plans to change the VAT treatment of the repair and renovation of buildings.A

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