Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of VAT on (a) repair and (b) retrofit works to older buildings; and whether she plans to review that taxation.

To stimulate the construction of new homes, the Government currently maintains a zero rate of VAT on new-build residential buildings. The Government also recognises the importance of reusing existing buildings and encourages this through the VAT system. Residential renovations are subject to a reduced rate of VAT of five per cent if they meet certain conditions, including conversions of buildings from one residential use to another, conversions from commercial to residential use, and the renovation of properties that have been empty for two or more years.

VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. Exceptions to the standard rate have always been limited and balanced against affordability considerations.

The Government keeps all taxes under review and makes decisions at Budgets in the context of the overall public finances.