As the famous saying goes, only two things are certain in life: death and taxes. Whilst most taxes in life, like council and income tax, are fair and justifiable in the grand scheme of things and go towards the greater good of the country, one tax really isn’t. We’re referring of course to VAT: value added tax.
What is VAT?
VAT is a form of ‘consumption’ tax, used to raise revenue through taxing a range of goods and services. It can be considered as a form of sales tax, where only the end consumer is taxed.
This rather ambiguous tax has been used by successive governments to tax everything from prams, chocolate, and clothes to electrical goods, takeaway food and fruit juice.
Why is it bad?
VAT is a regressive tax. That means that the poorest people in society spend a higher proportion of their disposable income on VAT than the richest people in society: an Office for National Statistics report recently found that in 2009/10 the poorest 20% spent 8.7% of their gross income on VAT as opposed to the richest 20% who spent only 4.0% of their gross income on VAT.
The Consumer Protection Association (CPA) is committed to lobbying the government to remove VAT on housing renovation and repair work. We not only see VAT as inherently unfair on mid to low income families, we also see it as a significant barrier to economic growth; both in the fenestration industry, and the wider economy.
Why abolish VAT on home improvements?
Arbitrarily, VAT is not levied against new build construction projects or some energy saving measures. Removing VAT on ALL domestic building work and glazing installations is a simple and effective way to fortify economic growth and meet the government’s environmental and social targets.
VAT relief on new builds has helped the UK economy grow in the short-term, but the construction sector can be a volatile place. Reducing tax on renovation work will create long-term economic growth and sustainable jobs due to the consistent demand for upgrading homes.
Britain has the second worst quality housing in Europe. With the housing crisis steadily getting worse, the need to update existing stock and provide fit homes for people to live in is more important than ever. That’s why the VAT that people pay on home improvement products and services needs to be reduced, or abolished completely.
VAT-free home improvements will be more affordable, making existing houses fit to live in, reducing fuel bills and increasing living standards for everyone.
The Consumer Protection Association: fighting VAT
The Consumer Protection Association is committed to abolishing VAT charges on home improvement products and services. Write to us on Twitter using the hashtag #AbolishVAT, or join our campaign to abolish VAT on home improvements here.