14
JULY 2014 PRO INSTALLER
PRO NEWS
www.proinstaller.co.uk
Half Of All Home Owners
Have Requested Cash-In-Hand
Building Work To Avoid VAT
More than 55% of all
home owners have
requested cash-in-hand
building work to avoid
paying VAT according
to new research by the
Federation of Master
Builders (FMB).
Brian Berry, Chief Executive of the
FMB, said:
“This research confirms what we already
suspected – too many otherwise law-abiding individuals are asking their builder to
carry out cash-in-hand construction work
at 0% VAT in order to cut costs. What’s
more, when the professional builder refuses, the home owner will all-too-often find
a rogue trader that is willing to operate
within the black economy. That’s when
home owners inevitably become ensnared
in nightmare situations with sub-standard
refurbishment work that has been carried
out with little or no regard for health and
safety.
“Research from Experian shows that the
black economy in construction is worth
almost £10 billion a year but this is a conservative estimate and our latest research
suggests the real figure is much higher.
If government wants to limit the activity
of rogue traders operating in the black
economy it should reduce the rate of VAT
to 5% on all housing renovation and repair
work leaving almost no competitive advantage for those disreputable builders. Not
only would this help eradicate the black
economy, it would also boost the economy
by more than £15 billion over five years to
2020 and create more than 95,000 jobs.
“Charging the top rate of VAT on home
refurbishment serves no purpose other
Diesel
drivers pay
the price
for cheaper
petrol
Diesel drivers are
paying up to 3p a litre
more than they should
for their fuel, research
for June’s AA Fuel Price
Report indicates, taking up to £1.5 million a
day extra from diesel
drivers’ pockets.
‘£15 billion over five
years to 2020’
than to put money in the pockets of rogue
builders and perpetuate the culture of
home owners requesting cash-in-hand
work. It makes criminals, and often victims, out of families and individuals who
are struggling with the cost of living and
acts as a barrier to growth in the economy.”
Paula Higgins, Chief Executive of
HomeOwners Alliance, a consumer group
championing homeowners, said: “Having
a high rate of VAT on repair work creates
a black market which is bad for homeowners, builders and other taxpayers.
Lowering VAT will help cash-strapped
families living in cramped homes in a
state of disrepair.”
Pump prices for mid-June
average 130.47p a litre for
petrol and 135.7p for diesel,
according to the AA. A
month ago, the fuels averaged 129.92p for petrol and
136.26p for diesel.
The Iraq crisis helped lift
the price of oil from around
$109 a barrel at the beginning of June to above $113
but much of the potential
to push up wholesale prices
was offset by a stronger pound breaching the
52-week high against the
dollar, after the Bank of
England’s governor hinted
at an interest rate rise.
Latest pump prices have
created a price-gap between
petrol and diesel of 5.23p
a litre, despite the gap at
wholesale price level averaging just 0.8p over the past
month, says the AA.
Compared to neighbouring
countries, EU statistics show
the UK’s failure to pass on
the near-parity of wholesale
petrol and diesel prices to
drivers at the pump.
While diesel drivers in the
UK have lost out because
fuel suppliers and retailers
have increased their margins
by not passing on more of
the cheaper wholesale costs,
petrol drivers have benefited from lower margins on
theirs. In effect, says the AA,
suppliers and retailers are
charging 1p a litre less to
provide petrol at UK pumps
while the fuel industry has
increased how much it takes
from diesel drivers after tax
and product cost.
The 3p-a-litre diesel price
rip-off means that UK diesel
drivers are overpaying by as
much as £1.48 million a day,
says the AA.
Edmund King, the AA’s
president, said: “It has long
been known that, for short
periods, diesel margins can
be a penny or so higher
than petrol. Yet greater local
price competition, more
miles to the gallon and a
longer time between fill-ups
has meant that the diesel
mark-up has gone largely
unnoticed. This summer the
gap is too big, gone on for
too long and is even more
unfair.”