In response to a question asked by Sarah Olney (Richmond Park), Financial secretary Jesse Norman ruled out VAT reduction on residential extensions and alterations in a written statement to the House of Commons, saying this reduction would cost the exchequer £6Billion a year.
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Q Asked by Sarah Olney (Richmond Park) Asked on: 13 July 2020
A Answered by: Jesse Norman Answered on: 21 July 2020
Consumers already benefit from a reduced VAT rate of 5 per cent on residential construction under certain conditions. This includes conversions of buildings from one use to another, and the renovation of properties that have been empty for two years or more prior to the renovation work. Going further would be very expensive: reducing VAT on all property renovation, repairs and improvements would cost the Exchequer approximately £6 billion per year. Although all taxes are kept under review, the Government has no plans to review the VAT treatment of construction at this time.