To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of reducing the rate of VAT on refurbishment, repair and maintenance of buildings from 20 per cent to five per cent.
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