The Budget tomorrow has prompted the Federation of Master Builders (FMB) to warn that a possible increase in the rate of VAT for repairs and maintenance work of buildings could be a charter for cowboys.
Richard Diment, Director General of the FMB said: “Any increase in the current rate of VAT for building work would merely result in a massive boost for the informal economy because more and more cash strapped householders would resort to ‘cash in hand’ as a way to avoid paying a possible 20% extra cost on maintaining their home. The end result will be not to raise more money as the Chancellor intends but simply a means to drive more money into the informal economy.”
He continued: “The danger of inadvertently boosting the informal economy is that more people will be put at risk by unscrupulous rogue traders who will exploit cash strapped customers. We know that two years ago more than £170 million was paid to rogue traders by members of the public and given the current economic crisis this figure will have probably increased as householders tighten their belts.”