The Government is being urged to slash VAT on the refurbishment of health and social care buildings to help drive up standards and give a boost to the struggling construction sector.
The move would be particularly useful in the social care marketplace, enabling more space to be created to support people in the community and keep them out of hospitals, according to Robert Kilgour, chairman of Renaissance Care Scotland.
He is urging Chancellor, George Osborne, to temporarily cut VAT from 20% to just 5% for property refurbishments, renovations and improvements in his forthcoming March budget.
Across the industry, I know dozens of refurbishment programmes which simply can’t get off the starting blocks due to the costs involved
Kilgour argues this would give the green light for dozens of much-needed improvement programmes around the country, enhancing standards in social care and providing business for developers.
He told BBH : “Across the industry, I know dozens of refurbishment programmes which simply can’t get off the starting blocks due to the costs involved.
“VAT of 20% is too high a price to pay when we’re talking about improvement works on healthcare properties that can run into hundreds of thousands of pounds at a time.
“By cutting the VAT rate to 5% for companies and partnerships in the healthcare sector, the Chancellor could at a stroke give the green light for dozens of projects across the UK, protect jobs and potentially create hundreds of new ones in the construction industry.
The Treasury should consider that 5% of something is better than 20% of nothing
“As it is, these projects are not happening. This is not just the care home sector we’re talking about; it’s also affecting children’s nurseries, dental practices, doctor’s surgeries and other healthcare properties that could all benefit from this change in policy.”
Commenting on recent criticism of standards in care homes in the UK, he added: “Standards in the industry are improving. However, cutting the rate of VAT on capital refurbishment projects now will lead to a step change in the quality of care these facilities can offer now and for years into the future.
“The Treasury should consider that 5% of something is better than 20% of nothing.
“This measure would be a quick and effective way to boost the economy and would actually raise more net tax revenue in the long-run than is happening at the moment.”
What do you think should be done to help the industry move forward in the face of cash cuts? Do you agree with a temporary cut in VAT? Email your thoughts to the editor at jom@hpcimedia.com
