Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Talks due on low VAT future

NEWS - European Council of Ministers considers taxation issue as directive on repair and maintenance work nears expiry

LOWER VAT rates are back on the agenda in Europe as finance ministers prepare for talks on the issue in November.

The European council of ministers will discuss the future of a directive allowing member states to levy lower rates of VAT on repair, maintenance and improvement work which is due to expire at the end of the year.

Eight countries in the European Union have used the directive to set lower rates, although the UK ? the current EU president ? only allowed an exper iment in the Isle of Man.

Focope, the European Parliament's construction lobbying group, has criticised the UK's reluctance to tackle the VAT issue so far in its presidency.

It warns that 250,000 jobs could be at risk across the EU if member states are forced to reinstate higher rates in just over two months' time.

Conservative MEP and Focope chairman Den Dover said: 'A lower rate of VAT is an incentive to improve the housing stock, something countries in eastern and central Europe in particular are crying out for.

'It would be easy for the council to show its commitment to creating jobs and boosting growth by agreeing to a permanently lower VAT rate.' Focope is also calling for a reduced rate of VAT on building work for aged or disabled people, as well as on energy-efficient buildings.

Chancellor Gordon Brown ducked questions on the issue in July, saying only that discussion between member states was ongoing.

But Mr Dover added: 'We have stressed the importance of this issue in maintaining and creating jobs.

Frankly action is needed, not just discussion.' The MEP has tabled a detailed question in the European Parliament on interim measures in the pipeline to protect home owners from massive VAT rises should the directive expire without agreement.