VAT

With the change back to 17.5% VAT now upon us, I will be interested to see just what impact it will have on the construction sector in Scotland.

Apart from ensuring some big tellys and blueray players were bought, it feels as though the reduction has had very little impact. The larger projects stalled by the downturn would have been zero rated or exempt for the most part and the actual saving for small domestic projects was nice but not exactly a dealbreaker.

What I find annoying was that the change was implemented so quickly which did not give clients or design teams the time needed to best take advantage. Had they announced the reduction and waited six months before implementing it might have kick started a few projects.

My main irritation with the governments VAT strategy is that it penalises refurbishment and extension while rewarding new construction. Surely this flies in the face of common sense and the 'reduce, reuse, recycle' mantra.

The government was quite happy to plow money into the car industry via the scrappage scheme, surely it would make sense to do the same sort of thing for the construction sector; providing economic benefits for the vast number of people employed in construction and supporting industries.

It will be interesting, in the run up the general election, to see if any of the main parties are far sighted enough to redress the VAT disparity.