Lack of construction output means VAT policy should be delayed says FMB

The planned implementation of the reverse charge VAT should be delayed to avoid further cashflow issues for small construction firms. That’s according to the Federation of Master Builders, which points out that, as building sites re-open, productivity has understandably dipped due to important social distancing measures.

Brian Berry, Chief Executive of the FMB, said: “Small to medium-sized (SME) builders are safely returning to work, but important social distancing measures on sites are understandably hampering productivity. That this is having an impact on cashflow means it’s essential that the Government delays its introduction of reverse charge VAT by at least one year. This disruptive tax change risks hitting SMEs the hardest at a time when we need to protect jobs and livelihoods. Delaying this policy would acknowledge that SMEs provide the bedrock of the industry and help support the recovery of the construction sector.”

low res builders on building site sstock
Social distancing requirements for building sites are impacting productivity

He added: “Looking ahead, we know that further support will be necessary to ensure SMEs lead the recovery of the industry. I’m calling for several key interventions, including a national retrofit strategy which will help us to reach net zero carbon and create jobs. I also want to see barriers removed for local house builders so they can bring forward more homes, and greater support for SMEs to train apprentices. These firms operate across the country, are crucial to their local economy and are therefore central to the Government’s ‘levelling-up’ agenda.”

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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