Ahead of todays Budget, the Glass and Glazing Federation (GGF) has written to Chancellor George Osborne to outline the Federation’s concerns on energy efficient schemes and also to urge the Treasury to reduce the rate of VAT from 20% to 5% on home improvement work and on energy efficient windows.
The letter was accompanied by the recent independent research report by Experian on the effects of a reduction in the rate of VAT on housing renovation and repair work.
The report sponsored by the GGF, highlights that a VAT rate reduction on housing renovation and repair could boost the UK economy by more than £15 billion from 2015 to 2020, according to a new independent research report by Experian. This reduction could also create more than 95,000 jobs and save 240,000 tonnes of CO2 from thousands of homes.
The report is also backed by more than 60 charities, trade associations, business groups and financial institutions that are united in calling on all three main political parties to commit to this VAT reduction in their 2015 General Election manifestos.
Nigel Rees, GGF Group Chief Executive, commented “Following the recent independent research report it is clear there are significant long term benefits if the VAT rate on home improvements, repairs and renovations is reduced from the current rate of 20% to a rate of 5%. We urge the Treasury to seriously look at the possibility of reducing the VAT rate to boost the economy, create jobs and improve the UK’s housing stock over the next ten years and beyond.”
Also in the letter the GGF outlines its concerns over the lack of incentives for homeowners to make their homes more energy efficient through schemes such as the Green Deal. The Federation highlights the disparity of VAT rates for energy efficient products, with most energy efficient products at a rate of 5% VAT whilst energy efficient glazing remains at rate of 20% VAT.
Nigel Rees continued, “It is completely unfair that energy efficient windows are still at a 20% rate of VAT while other energy efficient products are at 5% rate of VAT. When you consider the amount of energy lost through inefficient windows and also the Industry’s investment in technological innovations that have been created with the sole purpose of being energy efficient, there is no justification for them to be at the higher rate of VAT. This inequality is both a disincentive for homeowners to install energy efficient glazing and also a trading disadvantage for glass and glazing companies.”
Chancellor George Osborne will announce the Government’s Budget 2014 on Wednesday 19th March 2014.