The European Commission's proposals to allow reduced VAT rates on labour intensive and locally-provided services, is a victory for every professional builder and householder in the UK wanting to carry out repairs to their home, says the Federation of Master Builders (FMB).

The FMB was responding to the Commission's proposal to change the VAT Directive 2006/112/EC to allow Members States to apply reduced VAT rates.

Brian Berry, Director of External Affairs at the FMB said: "At a time when the construction industry is experiencing serious difficulties with many builders losing their jobs and householders increasingly unable to afford to maintain their homes a cut in VAT for repairs and maintenance work would help the building industry as well as millions of householders. It is really encouraging that the Commission is now proposing to allow Member States to cut VAT on home renovation and maintenance. All that is needed now is a commitment from the UK Government to cut VAT rates."

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Mr Berry continued: "The problem is that cowboy builders flourish in this country by evading VAT by offering the public supposedly cheap deals which all too often leave the client ripped off. A cut in the rate of VAT on domestic building work from 17.5% to 5% would reduce significantly the commercial advantage of the VAT evading trader. The financial incentive to choose a rogue trader would diminish and create a level playing field. This would drive the rogue traders out of the market as customers begin to focus on quality and value and not just price."

(CD/JM)