A demand to introduce tax breaks on building materials for the Western Isles was raised at a ministerial working group meeting on Monday.
Introducing a cut in the rate of VAT on building materials specially for the islands would be created and sustained by the additional building projects encouraged under such a tax concession which would help offset the higher cost of goods imported onto the islands, the Scottish Government has been told.
Western Isles Council has teamed up with Orkney and Shetland island councils to press the Scottish and UK Governments for more powers following the Independence Referendum in September 2014, regardless of the vote outcome.
Local government minister Derek Mackay has set up a ministerial working group to develop options for devolving issues over energy, renewables, transport and governance.
Mr Mackay and Environment Minister Paul Wheelhouse have agreed to publish -
At a lengthy meeting in Stornoway, the ministers were urged to establish a special lower rate of VAT for the three islands’ building sector.
This would help offset the higher cost of goods imported onto the islands with the aim of sustaining jobs in the sector by encouraging more building projects.
After the meeting, Western Isles Council leader Angus Campbell said all the islands would receive an economic boost if they have more local control of their own resources which would attract capital and investment.
Mr Campbell said: “We talked about giving tax breaks for the construction industry.
He added: “I asked about reducing the VAT on building materials. We would have a differential tax rate for the islands.”
Different VAT rates are already applied in certain sectors so why not introduce a similar scheme for the more remote areas of the country suggested Mr Campbell.
Removing or cutting VAT on building materials would act as a stimulus to the construction industry.
This is likely to win support amongst the local building trade
Paul Murray of Stornoway-
He thinks it would help the beleaguered industry which is presently facing pay-
Mr Murray said: “Every little helps. In the islands we are paying over the odds as it is with carriage on the ferry.
“This may be just the thing to make people spend and create work.”
It might create a level playing field with the mainland.”
Call for VAT cut for island building industry 24/3/14
Paul Murray of Stornoway-