No VAT cut for building refurbishment – Treasury

  • 19/01/2021
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No VAT cut for building refurbishment – Treasury
HM Treasury will not be considering a cut to the rate of VAT that applies to building refurbishment, repairs or renovations.


A lower VAT rate of five per cent applies to these situations already and Treasury dismissed the idea of cutting this to zero.

Responding to a written question, financial secretary to the Treasury Jesse Norman said: “The government already maintains a reduced rate of VAT at five per cent, subject to certain conditions, for residential renovations.

“Introducing a zero rate of VAT would come at a significant cost to the Exchequer, estimated at about £4bn per year, which would have to be balanced by a reduction in public spending, higher borrowing or increased taxation elsewhere.

“While the government keeps all taxes under review, there are no plans to change the VAT treatment of the repair and renovation of buildings.”

Conservative MP for Wycombe Steven Baker had asked the Treasury to assess the impact of reducing the VAT rate on building refurbishment works to zero.


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