The rise in VAT announced yesterday could hit the retrofit market, according to Construction Industry Council chief executive Graham Watts.
Chancellor George Osborne announced at the Budget that VAT would rise from 17.5 per cent to 20 per cent from January 2011.
Mr Watts said the lack of an exemption for work to make buildings more energy efficient would damage the UK’s chances of meeting carbon reduction targets.
“This will impact on the retrofitting of buildings. It will cost people even more to do bring offices and houses up to scratch.”
However, he said that overall the Budget was positive for the industry.
“There was guarded good news such as the reduction of corporation tax, and the emphasis on public spending in those areas struggling with a lack of private sector spending.”