Small construction firms hit by VAT hike
12 January 2012
More than one in five small building firms, including many CIS card holders, has had to cut jobs as a result of the increase in VAT.
The Federation of Master Builder's (FMB) latest State of Trade Survey found that 22 per cent of small building firms reduced their number of employees as a result of the VAT increase to 20 per cent last year.
Furthermore, over half of the firms polled claimed that they had seen a noticeable reduction in workload since the introduction of the new VAT levels.
Brian Berry, director of External Affairs at the FMB, said the organisation had warned at the time that a VAT hike would negatively impact the construction sector.
"As the economy stalls the Government should be re-examining the case for a cut in VAT as a targeted reduction would help generate much needed jobs and growth on a very limited budget," he added.
The research follows comments by the Institute for Public Policy Research which suggested that the UK is facing a lost decade of construction.
Filed under: CIS, CIS card, construction industry, FMB