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Demolition highlights VAT failing

THE FEDERATION of Master Builders has attacked the demolition of a gym to avoid VAT on one of the Government's flagship city academy schemes.

The gym at the Mallory School in Lewisham, south London, was built less than 10 years ago for £1 million.

But the new city academy's sponsors - the Haberdashers'Company - decided that unless it was demolished the project would face an extra £4 million bill because it would count as repair, maintenance and improvement work, which is charged at a full VAT rate.

FMB external affairs director Andrew Large said: 'We have been lobbying Government to reduce the VAT rate.This puts into focus what we have said.'