Daily Mail: Taxman made £440m from flood damage

Michael Lea

The taxman made almost £440m in profit from last summer's flood damage, it was claimed last night.

Householders forced to carry out repairs to their water-ravaged properties paid £525m in VAT for the work, according to figures from insurers.
Because the Government contributed only £86m to help affected areas, the Treasury netted £439m.

Nearly 45,000 homes - mostly in Hull, Sheffield, Gloucester and Tewkesbury - were deluged by sudden downpours in June and July last year.

Using figures from the Association of British Insurers, researchers calculated that householders affected in June paid £5,250 VAT on average repairs of £30,000. Those hit the following month paid £7,000 for £40,000 of work.

Campaigners want VAT on repairs and home improvements cut from 17.5% to 5%. Such a move would have reduced the taxman's take to £150m.

Matthew Elliott, chief executive of the TaxPayers' Alliance, said: 'It is disgusting that the Treasury has profited from the misery and suffering of others.

'VAT on house repairs has penalised people who suffered a natural disaster. The taxman has sunk to a new low with this shameful tax grab.'

The Federation of Master Builders, Royal Institution of Chartered Surveyors and Empty Homes Agency are among the organisations that want a VAT cut.

Brian Berry, the federation's director of external affairs, said: 'It is clearly wrong that the Government should be making such large amounts of money out of other people's misfortune.

'People faced with a massive clean-up bill have had to give the Chancellor a huge windfall.

'If the Government really wanted to help get these flood-damaged communities get back on their feet, cutting VAT would be a very good place to start.'

The total cost of the floods has been put at £3bn, including damage to homes, 14,500 businesses, nearly 500 schools and scores of other facilities.

Rail lines, roads, bridges and other infrastructure was also affected.

Some residents needed to be rescued by the RAF as the waters rose, while the Army was called in to distribute fresh water to those whose supplies were cut off.

A spokesman for the Treasury said: 'The UK has the widest and most generous range of reduced and zero VAT rates in Europe, saving UK consumers over £28bn every year.'