Local businesses call for reduced VAT on construction projects

According to two local architects, older buildings in Newtown and across the region could be saved from dereliction or demolition and emissions and energy consumption could be reduced if VAT were reduced on building projects in ecological renovation.

In addition, more construction jobs would be created and investment would be made to protect the existing built environment, according to Doug Hughes and Richard Lewis of Mid Wales-based architectural firm Hughes Architects.

The comments follow the latest campaign to reduce value added tax (VAT) to zero on deep green renovation projects for residential properties in the UK. Materials and labor on these construction works are currently set at a maximum of 20%.

The UK government has already come under pressure from big business to reduce VAT from 20% to 5%.

And with Wales having the oldest (pre-1900) building stock in Western Europe, reducing VAT could have a significant impact on future investment.

“We live in a world where we are all being asked to do our part to help reduce climate change by reducing our energy consumption. In the UK we have thousands of older buildings that are less insulated and poorly designed for energy efficiency,” said Doug Hughes, Principal Architect and Managing Director of Hughes Architects, which has design and planning offices in Newtown and Welshpool, Powys. , and Aberystwyth in Ceredigion.

“While new construction projects are essentially implementing sustainable construction methods and products to create energy efficient or carbon neutral properties, we have a major problem with the majority of existing properties, mainly houses.”

A petition* has been launched on Change.org calling on the UK government to stop VAT on green renovation projects.

Harry Paticas, who started the petition, said: Homes in the UK are responsible for around 15% of total carbon emissions, with heating responsible for over 60% of energy use. With the current climate emergency and the serious risk of runaway global warming, there is an urgent need to eco-renovate our homes to drastically reduce emissions.

“With no significant funding for a UK refurbishment program and homeowners (private and social) forced to pay 20% VAT on all work in existing homes (with some exceptions), there is a strong deterrent to carrying out extensive renovation work.”

Richard Lewis, Architect and Principal at Hughes Architects, added: “There are grants and other incentives at national and regional level to reduce energy consumption through better insulation and other works. But these are small and few in number, and have very little impact.

“There has to be an incentive for landlords to want to reduce the impact of their properties on the environment. One solution is to reduce VAT on project materials, which can account for a large portion of the cost. »

Hughes Architects has been committed to designing energy efficient homes and buildings for many years and is committed to the RIBA Climate Challenge 2030.

Last year, construction of the firm’s first certified Pasivhaus homes was completed. These were built for Powys County Council and were one of the first social and affordable housing projects of this type in Wales.

Doug and Richard, who lead the firm’s 14 strong planning and design teams, are committed to increasing the number of carbon neutral properties they design for clients in the domestic and commercial realms.

This includes work on existing, old and listed buildings.

“For several years, the construction industry has been developing green and sustainable building methods and products to reduce the industry’s impact on the environment,” Doug said.

“We incorporate the latest design methods into our work to create properties that have a reduced impact on the environment, and we want to be at a point where the majority of them are carbon neutral.

“We spend a lot of time working with and meeting with producers of new materials and construction methods to achieve this. Passivhaus is one and we have worked closely with Pave Aways Construction to create such a development in Sarn, near Newtown in Powys.

“If we can encourage government, both in the UK and Wales, to help create opportunities that incentivize more green renovations to properties, it will have a bigger impact on climate change for all of us. .”