Tax Rebate for Home Services to Create Jobs

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Dear reader, 

As a business owner, I am quite certain that you must be experiencing the great negative effects and impact from varying tier restrictions. 

In our £6 billion per year industry in the United Kingdom (domestic cleaning and home services), our company Fantastic Services has seen the usual drop in requests for new services and increased cancellation rates. Currently the latter stands at 40%+ and is increasing whenever the government announces new restriction measures. 

The guidelines are clear that if you can’t work from home you can go to work. However, being allowed to work and having the client’s trust to visit their home when the restrictions change every single day is another matter. Some services are peaking such as child care and removals, but we have all seen the drop in productivity of workers, with children at home, when schools are shut. 

During the first lockdown, the government had originally introduced the CBILS, Bounce Back loans and furlough schemes, however, the intention had been that this would be a short term measure. We are in lockdown number three and no further government support is provided, no top-ups for CBILS loans, no other measures. The government has forgotten us and our workers. Some of them have managed to stay on furlough, but the rest were made redundant, without any other sources of income. The government has driven them to food banks and caused them to worry that they will be left out on the streets. 

Ask yourselves the following – where is my government in times like this when I constantly ask myself if my business will survive and how to make sure my employees don’t starve? Because I keep asking myself that same thing over and over, and regardless how positive and productive and innovative I can be there is not much I can do when I am being restricted constantly by the government. Who, mind you, we all contribute to massively with our taxes. 

I want to state it clearly - we do not need another form of loans. We need a change. The change I want to see is a long term thinking and forward-looking policies. We may have left the EU, but we can take examples of practices introduced in some of the countries before the pandemic. The format of that change which I am a strong supporter of is the removal/reduction of VAT and tax rebates on hiring a person to do work for a client in their homes. It’s called RUT in Sweden and here is a simple version of the scheme in English - https://www.hemfrid.se/en/rut-deduction Each household can deduct up to £7000 per year in tax when they use a registered company providing a cleaner or a tradesperson at their home. 

This will provide better regulation for the home service industry, providing a solution to fight against unregulated cash in hand work; so service workers and the companies they work for are correctly vetted, creating an improved taxation system for government and greater consumer confidence across the industry. Consumers will benefit from tax rebates, increasing demand and ultimately increasing jobs -  with businesses who are benefiting from reduced VAT able to invest more in job creation. We must create more jobs as we need to come back better and stronger from this pandemic. 

If you support my suggestion and are a firm believer that the government must do more for its citizens, reply to this letter with your personal and business name. 

We can make that change happen if we unite behind it. 

Be my ally in this endeavour.

Yours sincerely,
Rune Sovndahl
Founding Director of Fantastic Services Ltd