VAT's the way we could hammer all those cowboy workmen

May 21 2008

Latest figures from Consumer Direct Scotland (CDS) reveal an alarming 25 per cent increase in complaints against builders, plumbers, electricians and other home improvement traders. Building work complaints totalled £1.8m alone.

Beyond the normal advice for homeowners to try and avoid these problems, such as finding a tradesmen through recommendation or through trade associations approved by the Construction Licensing Executive, the biggest attack on the ‘cowboy’ builder is a simple action that can be taken by the UK Government through reducing VAT on home improvements.

A reduction in VAT on domestic repair, maintenance and improvement work to 5 per cent will have a significant benefit to the consumer, including reducing the ability of the ‘cowboy’ builder to undercut reputable, legal builders who will be able to compete on a more even playing field. This position is reinforced by recent surveys which suggest that up to 50 per cent of consumers are likely to ask their builders for a “VAT off for cash” deal, and the only way to reduce this is to reduce the rate of VAT itself.

The benefit of slashing VAT is backed up by studies in France, the Netherlands and Isle of Man which demonstrate a reduction in rogue trader activity through a reduction in VAT, with any such reduction passed onto the customer, making more money available for home improvements.

The issue of ‘cowboy’ traders is an important issue which touches upon the life of everyone in the country, and a cut in VAT is a key step in the elimination of these traders and the misery they cause.

Michael Levack, chief executive, Scottish Building Federation.