CPA rues lack of VAT cut in government plan

The Construction Products Association and the Federation of Master Builders were both disappointed that the low carbon construction action plan, published today, did not propose a cut in VAT for energy-saving refurbishments of homes.

However both welcomed other aspects of the plan.

John Tebbit, Industry Affairs Director at the CPA said:  “It continues to baffle our industry that government feels it appropriate to charge a lower rate of VAT on the energy that it is trying to persuade us not to use, than the rate on the products that will help us reduce it.”

“Given that we are encouraging householders to take up a Green Deal package on which they will be given professional advice, which will be delivered by accredited installers and which guarantees to make significant energy savings, we cannot understand why the level of VAT charged on this cannot be set at the same 5% level.”

But he added that the plan correctly idetified the key issues and welcomed leadership from government to drive low carbon building.

The Federation of Master Builders also wanted to see VAT reduced to 5 % on green improvements.

The report is a response to the Low Carbon Construction Innovation and Growth Team’s (IGT) report published in November.

It proposed that many of the team’s suggestions be implemented but some have been dropped or have not been included for action because they require further consideration.