FMB warns of likely decrease in work and increase in rogue traders as VAT rise hits hard

Increasing the VAT rate from 17.5% to 20% could lead to over 11,000 job losses in the construction sector over the next decade, according to the Federation of Master Builders.

The FMB also expects a rise in the number of 鈥渞ogue traders鈥� as the VAT increase hits the sector.

The federation鈥檚 director of external affairs, Brian Berry, said: 鈥淐onstruction has been badly affected during this recession so the VAT rise could not come at a worse time.

鈥淭he increase will result in a 2% decrease in demand for domestic repair, maintenance and improvement (RMI) work, which will
mean 11,400 job losses in construction alone by 2019.鈥�

Suzannah Nichol, chief executive of the National Specialist Contractors Council, is also wary of the potential for rogue firms to take advantage of the higher VAT.

She said: 鈥淭he increase could lead to pressure from customers and make it harder for legitimate businesses to win work. VAT
at 20% is much easier for customers to work out and quantify just how much tax they are paying.

鈥淲hile a 2.5% increase might not affect a smaller purchase, it could make someone think twice before undertaking a larger project.鈥�

 

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