Businesses are calling for Chancellor George Osborne to give them a break on VAT to help reduce financial burdens on the construction industry.
The call was made before the Scottish Chambers of Commerce annual dinner in Glasgow last night.
Chairman Mike Salter said: “Much could be done to revitalise the building and construction sector if more work was exempt from VAT.
“New houses are VAT exempt but extensions and refurbishments incur VAT at the full 20 per cent rate introduced by the Chancellor more than two years ago. This has added to the problems faced by our construction sector, a major source of employment.
“Mr Osborne has gone back on pasties and caravans. He should go back on this one, too. To get the economy on the move, construction needs a break on VAT.”
The sector was singled out for attention by Holyrood finance secretary John Swinney in his budget statement last week.
Problems in the construction industry have been used to explain why the country slipped back into recession.