The rate of VAT for energy efficient improvements needs to be cut if the Government's 'Green Deal' retrofit programme to upgrade the country's building stock to make it more energy efficient is to be successful.
This is the warning from 27 different organisations in the construction, property and business industries as well as environmental groups who are worried that unless VAT is reduced consumers will be reluctant to take up the Green Deal when it is launched next year.
As MPs prepared to debate the final stages of the Energy Bill, which is the legislation that will introduce the Green Deal, the Cut the VAT campaign supporters have signed a joint statement urging MPs from all parties to ask the Government to reduce the rate of VAT to 5% for all Green Deal approved measures in order to begin to stimulate demand.
Brian Berry, Director of External Affairs at the Federation of Master Builders (FMB) said:
"At a time when energy prices are soaring the need to make our homes more energy efficient has never been so urgent. It is critical that the Green Deal is a success but it needs to be attractive to consumers who may be reluctant to have a 'charge' attached to their property.
"Other incentives are needed to support the Green Deal which is why a cut in VAT for Green Deal energy efficient work makes sense."
John Walker, National Chairman at Federation of Small Businesses (FSB) said:
"Confidence among small business owners fell dramatically in the second quarter of the year with businesses in the construction sector not overly confident about their prospects for the third quarter. The FSB is calling for a cut in VAT for Green Deal improvements to help to restore growth in the construction sector and to help the Government achieve its carbon reduction targets.
"With just over a year until the Green Deal kicks in and as business and household budgets remain squeezed it is vital that the Government begins to incentivise energy efficiency improvements to ensure that the Green Deal is a success."
Darren Shirley, Sustainable Homes Campaign Manager at WWF-UK said:
"The Green Deal will be the only game in town from the end of 2012 and its success is critical to insulating consumers from rising household energy bills and to meeting the UK's carbon budgets.
"With current energy efficiency programmes under-delivering and with the Green Deal not yet looking to be an attractive offer for households, the Government must introduce measures that will help drive the market to ensure the Green Deal is taken up.
"Cutting VAT on energy efficiency improvements as part of a package of incentives is one such measure that will be needed."
Following a successful pilot, 1 September saw the formal launch of a new scheme to combat mortgage application fraud.
HM Revenue & Customs, the Council of Mortgage Lenders and the Building Societies Association have worked together on the development of the Mortgage Verification Scheme and see it as an important additional tool to help beat fraud. The National Fraud Authority estimates the cost of mortgage fraud at £1 billion last year.
The scheme was announced in the March 2010 Budget and has been refined during the pilot period since. Use of the scheme will be limited to cases where lenders reasonably suspect, following their own rigorous checks, that mortgage fraud may be taking place.
Mortgage lenders will send relevant details of mortgage applications where they have inadequate evidence of declared income and suspect fraud using a secure electronic platform to HMRC, which will check income details declared to lenders against information provided in income tax and employment returns. HMRC will then advise lenders whether or not the details correspond, which will inform lending decisions.
As well as aiding mortgage fraud prevention, the scheme will help HMRC to risk assess whether the information it has been given on applicants' tax affairs is correct. In return, lenders gain access to a source of data that helps them to lend responsibly and manage risk. Financial institutions use a variety of sources to help them assess fraud risk, however, and will not rely solely on responses provided by HMRC to reach a decision where the lender suspects fraud.
HMRC has set up a specialised unit to deal with the requests. Any mortgage lender who wishes to use the scheme may do so. Other than a fee of £14 plus VAT per case to cover HMRC's costs, lenders face no additional fees to participate. It is not anticipated that the scheme will have any significant impact on the time taken to reach a lending decision.
Housing association London & Quadrant and consultancy Pricewaterhouse Cooper published Where Next? Housing After 2015.
The report argues for a new, sustainable housing investment model to be introduced by 2015 to ensure a strong pipeline of affordable homes can continue to be viably developed.
It suggests that even with substantial business efficiencies allowed for, housing associations will need to borrow around £15 billion by 2015 to build 150,000 homes and meet stock reinvestment and refinancing commitments.
It also says the sector's capacity to continue developing will diminish swiftly and it would be very difficult for housing associations to manage a further large affordable housing programme under the same rules.
The report calls for a model to be introduced which recognises and tackles the growing housing crisis facing people trying to access good homes in both the market rented sector and the affordable housing sector.
The key features of the proposed new investment model would include:
To read the report in full click here.
[Link2] Can pension cash solve social housing's funding crisis?
In his article for the Guardian's Housing Network, Chief Executive Peter McCormack explains how Derwent Living looked at alternatives to difficult to secure conventional bank funding and worked with Aviva to bring pension funding into social housing.
