Energy efficiency VAT incentives 'could enhance take-up'

More people would adopt energy efficient home improvements if VAT was reduced on such work.

This is the claim made by the National Home Improvement Council (NHIC), which has suggested such incentives will boost take-up and help households to reduce their fuel bills.

According to director of the organisation Andrew Leech, consumers currently have to "pay through the nose" for green enhancements to their properties.

He added: "Cutting VAT would save the consumer money and also it means that the consumer is more likely [than currently] to go to a builder who does charge VAT as opposed to a rogue trader who doesn't charge VAT."

Mr Leech noted energy saving efforts are being hampered by VAT and may go for cheaper adaptations to homes that may not last as long because they are paying high amounts in tax.

He pointed out that reducing the levy on sustainable improvements would mean that households were able to afford more expensive and better solutions that could even last the lifetime of the house.

The NHIC expert was commenting after the Federation of Master Builders proposed the government should slash VAT rates on home improvements to protect people from rogue traders and cut down on the number of builders taking cash payments to avoid the tax.

Brian Berry, the organisation's director of external affairs, remarked that a five per cent decrease in the charge would substantially reduce the £9.3 billion "informal economy" that exists in this field.

Thousands of British homeowners could be missing out on home improvements after Consumer Focus warned the flagship Warm Front scheme is likely to see a £30 million underspend in England this year, as it is not attracting the number of people seeking help from energy suppliers to improve heating systems and insulate properties that was expected.

The scheme is aimed at helping vulnerable households to improve the energy efficiency of their homes in order to reduce electricity and gas bills.