26 January 2011
FOR IMMEDIATE RELEASE:
The impact of the VAT rise for the building trade
Kevin Byrne, founder & MD of Checkatrade comments
SUMMARY
The increase of vat to 20% will have a disastrous effect on the building trade.
PRESS RELEASE
“The increase in VAT to 20% will have a disastrous effect on the building trade and prompt many more tradesmen to take on cash jobs, ironically driving down the government’s tax receipts.
“The government should consider carefully how to deal with the issue of the VAT threshold for tradesmen and review how to fix this – as it is simply not working. The threshold already makes it very difficult for companies billing over £60,000 per year to compete with smaller firms. And as the tax rises kick in, medium-sized businesses will increasingly find themselves at a disadvantage. The misconception amongst the public that accepting a cash job will save them VAT on the whole bill – materials and labour – only adds to the problem. In fact, all tradesmen, whether VAT-registered or not, will pass on the VAT they pay on materials to the customer. Yet the perception persists, making cash jobs seem more attractive financially than they in fact are.
“The Buildings industry is a major contributor to the British economy and it’s incumbent upon to the government to put the infrastructure in place to support our entrepreneurs. As the economy starts to contract again, it will be critical to the future of our building industry for government to review the threshold, and provide a more even playing field. If not, the temptation for many previously law-abiding tradesmen to take on cash jobs will only increase.”
ENDS
NOTES TO EDITORS
Checkatrade helps combat the UK's rogue trader problem by continuously vetting and monitoring local traders such as builders, plumbers and electricians. The idea was born in 1998 after a tornado hit the small West Sussex town of Selsey. Traders poured in from as far away as Liverpool and Manchester. Unfortunately, some ripped off the inhabitants of the town. Local businessman, Kevin Byrne, realised there was nowhere to check out the traders’ credentials and the company that became Checkatrade was formed.
Since then, Checkatrade has grown to include over 6,300 genuine trade members, growing by an average 120 new members every month, and, via the Royal Mail, distributes 5.9 million directories a year into communities throughout Hampshire, Surrey, Sussex, Dorset and Berkshire, while the website includes traders from across the UK.
CONTACT INFORMATION
PR / Marketing, Checkatrade
5 - 6 Sherrington Mews, Ellis Square, Selsey, West Sussex, PO20 0FJ
Tel: 01243 601234
Fax: 01243 601246
info@checkatrade.com
