Nothing is certain in life but death and taxes, or so Benjamin Franklin thought. How much tax is charged is a more contentious issue, but what is certain is that the tax system could be used as a powerful financial lever for improving the quality, sustainability and energy efficiency of the nation's building stock. At present, the standard 20 per cent VAT is charged across the country on most repair and maintenance work, while much demolition and new-build, including housing, attracts a zero rate. The disparity has existed since VAT was introduced in the UK in 1973, when all new construction and alteration work was zero-rated, whereas repair work was standard-rated. Alterations were soon shifted overto the standard VAT category, essentially making almost all retrofits liable for the higher rate. The differential between new build and refurbishment rates was initially more marginal but has increased in the intervening yearsto 15-20 per cent (see table overleaf).
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