Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential merits of reducing VAT on hospitality and housing renovation in Northern Ireland to increase the uptake of retrofitting measures in existing buildings.

The Government maintains a number of VAT reliefs on construction and renovation, including a zero rate of VAT on new-build residential or qualifying buildings, a reduced rate of VAT on residential renovations which includes conversions of buildings from one residential use to another, converted from commercial to residential use, and the renovation of properties that have been empty for two years or more prior to the renovation work. Renovation of commercial buildings attracts the standard rate of VAT and is recoverable in the usual way.

Expanding these reliefs to include all renovations would cost approximately £3.75bn per year and would require reductions in spending or increasing taxes elsewhere. The Government has no plans to conduct a review of the VAT treatment of construction.