Written question asked by Mike Hancock (Liberal Democrat) on Tuesday, 7 March 2006, in the House of Commons. It was due for an answer on Thursday, 9 March 2006. It was answered by Baroness Primarolo (Labour) on Tuesday, 14 March 2006 on behalf of the Treasury.

VAT (Housing)

Question: To ask the Chancellor of the Exchequer if he will take steps to harmonise the rate of VAT for new build and refurbished properties.

Answer: While agreements with our European partners allow us to keep our zero rates as they currently stand, we cannot extend them or introduce new ones. This means that in order to harmonise the rates of VAT on all building work and renovation, we would first have to give up our current zero rates for construction, including those for the construction of new charity buildings and new housing, and for approved alterations to listed buildings. While we continue to keep the impact of VAT on different types of building work under review, we have no plans to give up our existing construction zero rates.

Secondary information