RICS responded on 12 May to the European Commission’s Taxation and Customs Union Consultation on the review of existing legislation on VAT reduced rates.  

The Consultation asked stakeholders, the business community and the public whether the current provisional system of reduced VAT rates in labour-intensive services should be made permanent and extended to other locally-supplied services and environmentally friendly and energy-saving goods.  

RICS’ position is that the current reduced rate of VAT for the “provision, construction, renovation and alteration of housing as part of a social policy” should be made permanent and extended to all type of housing. Concerning energy-saving and environmentally friendly goods, RICS would also like to see a reduced rate.  

The main reasoning to support a reduced rate is related to RICS’ aim to move towards a low carbon built environment – by reducing the VAT on refurbishment and retrofitting of existing buildings, there will be strong financial incentives for owners to carry out energy efficient measure on their existing buildings. Tackling fuel poverty and exposing rogue traders are other arguments to be found in the RICS response.

You can download the RICS response in full on the right hand side of this page.