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VAT rise 'could cost jobs' and help 'rogue traders'
Published:  06 January, 2011

The Federation of Master Builders has warned that the 20% VAT rise could cost 11,400 construction sector jobs and leave homeowners vulnerable to rogue traders.

Brian Berry, director of external affairs at the FMB, said: “Construction has been badly affected during this recession so the VAT rise could not come at a worse time. It will result in a 2% decrease in demand for domestic repair, maintenance and improvement (RMI) work, which will mean 11,400 job losses in construction alone by 2019. This will seriously affect the recovery of the construction industry, when it comes, as there won’t be enough skilled workers available.”

The FMB has also told the BBC that rising prices will leave homeowners more vulnerable to rogue traders who offer lower prices for "cash-only" deals to avoid paying VAT.

"Homeowners will be badly affected as many might be tempted to use a rogue trader claiming they 'can make VAT disappear'," warned Berry. "However, rather than saving 20% many homeowners will lose their money either through shoddy work or the trader running off with a deposit and doing no work at all.”

To combat this, the FMB said the government should reduce the rate of VAT on home repairs.