Todays budget has seen Osbourne increase vat from 17.5% to 20%, for builders who are vat registered like myself this could be a big blow. Securing work in these times is already difficult with people looking to cut costs when having there building work done. When a company like mine prices for work obviously 20% on a reasonable size job is a big hit so when you get other builders who are not vat registered offering their services vat free then this will seem highly appealing. I guess a lot of these builders will work above the vat threshold fully aware of this and just hope they are not caught out, others will get the customer to buy the materials and then take cash in payment.
Whatever way people do it i can see a lot of builders de registering from vat in an attempt to secure work so certainly from the construction side this move could backfire.
Having said all that i know the government have to get some money from somewhere but i think this could force even more people to work under the radar. Any thoughts?