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Heritage Alliance Chairman Loyd Grossman

Heritage Alliance Chairman Loyd Grossman

The Chairman of the Heritage Alliance, Loyd Grossman, presented a speech at Cut the VAT coalition event on the 3rd March 2014. Grossman called upon MPs in the next parliament to reduce VAT on housing renovation and repair work from 20% to 5%.

Research carried out by Experian offers a compelling case for this which Grossman advised, ‘…could bring a number of significant economic, social and environmental benefits’. Figures quoted are large – estimated to create a £15 billion stimulus over the 5 years 2015-2020. It is thought energy efficiency upgrade work is more likely to be commissioned by home-owners as part of general repair work, as opposed to a one-off measure. Thus bringing wider environmental and economic benefits.

Social benefits of reduce VAT are reported to be the creation of ‘more than 42,000 extra full-time construction jobs as well as an additional 53,000 jobs in the wider economy by 2020’.

For more details access the full speech at the Heritage Alliance website here.

Some of you may remember that approved alterations to listed buildings and scheduled monuments was zero-rated VAT until the 1st October 2012. This was phased in and changed to the current 20%. (For more details refer to the HMRC VAT information sheet available via the English Heritage web-site). The VAT proposal by the Heritage Alliance is, therefore, slightly different in that it is proposed to be introduced to all existing houses.

Inevitably this means a greater number of heritage buildings (not just those of listed status) would benefit which is a positive step. It should also mean many buildings which are vulnerable to fall into disrepair through lack of maintenance would receive the attention they deserve. This in itself would be valuable for the sake of rescuing embodied energy in existing buildings, and encourage continuity of our culture embedded in the built environment.

Conversely it excludes non-domestic properties, however the thrust here is to target the greatest number of people for maximum economic, environmental and social gain. Perhaps the proposal does not go far enough with respect to building type, but potentially it could have a wide impact. It taps into the current prevailing wind of government – a focus on reduced domestic energy use, for example the Green Deal – and should make MPs sit up and take notice.

Do you think the proposal goes far enough? Should a zero-rate VAT measure be called for, or would this risk disinterest altogether from the government? What about non-domestic building, or listed buildings – should a separate initiative be developed for these?