Surveyors ask Government to help support construction jobs

As the economy continues to struggle, there are concerns that the increase to the VAT rate in early 2011 could have a negative impact on construction jobs in the UK. Now, chartered surveyors have called on the government to reduce the rate of VAT for domestic repair and maintenance jobs in order to protect the construction sector.

VAT hike could lead to loss of 34,000 construction jobs

In its budget recommendations, the Royal Institution of Chartered Surveyors (RICS) warns that the rise in VAT to 20 per cent could lead to the loss of 34,000 construction jobs by 2019.

RICS also wants empty property rate relief to be reinstated for 12 or 18 months as economic conditions allow, with the propriety to be for small businesses and regeneration schemes. RICS warns that without reform there may be a lack of available properties to support economic growth.

VAT hike is a ‘barrier to commercial activity’

The RICS report argues that empty property rates and the 20 per cent VAT rate act as barriers to activity in commercial property and construction. They have urged the Treasury to reform these taxes in order to provide an economic boost. As well as increasing property activity, RICS believes that reforms would provide new property for growing businesses, help meet carbon reduction targets and support regeneration.

RICS point out that every £1 spent on construction contributes £2.84 to economic activity and that the sector totals over 900,000 construction jobs. Encouraging activity in the sector will promote economic recovery and provide sustainable growth in the long term, RICS says.