Rune Sovndahl, Founding Partner of leading service provider Fantastic Services, is petitioning to clean up the home service industry through a “Swedish style” scheme that will remove cash in hand payments through government subsidised home services – enabling tax rebates for customers and reducing VAT for registered home service companies – in a campaign that aims to stimulate the jobs market.
Rune, who Co-Founded Fantastic Services in 2009, believes the initiative would have a positive effect in creating more domestic cleaning and home services jobs in an industry worth £6 billion per year in the United Kingdom.
He says, “the UK government is losing millions of pounds each year in under the table payments made to unregulated cleaners, plumbers, gardeners, handymen, builders and electricians; and I call upon the government to implement tax rebates that can be used to move people away from low quality work provided by so called “cowboy professionals”.
“We need to provide piece of mind for both the client – that they are dealing with a legitimate business; and to service professionals – that they will have a full legal right to be paid for delivering the service. “
The scheme has been highly successful in countries such as Sweden and Germany, and will allow households to deduct up to £7000 per year in tax when they use a registered service company, providing a cleaner or a tradesperson at their home.
Rune continues, “Historically, the markets have demonstrated that when an industry is transparent and there is greater regulation from the government, it creates further demand for those goods and services. This would help create opportunities for individuals who are interested to start their own business – maybe they are unemployed for a long time or maybe they were made redundant recently and wish to use the redundancy pay package for a new initiative. It’s a win win for the government, home service industry, clients and workers alike.”
In addition to subsidy payments by the government and tax rebates for customers; the proposed VAT reduction as part of the initiative is designed to aid larger companies who are employing cleaners and other professionals to deliver services.
Rune says, “a VAT reduction for home services will help stimulate legitimate, tax paying businesses not only to avoid redundancies, but also to be able to hire more people through those savings.”
He continues “adopting the example of the Swedish style model will provide long term solutions for industry workers, many of whom cannot work from home, and have received very little support throughout the pandemic. With Britain no longer part of the European Union, now is the time to implement a better forward thinking system that will help renavigate the sector and stimulate the gig economy.”
The revised tax system was raised by Rune in a letter to The Chancellor last summer – where he is now calling on industry leaders to support the campaign – already gaining backing from leading sector businesses including Aceify, Housekeep, Uspaah, Koru Kids, Slip Safety Services and Oxwash, as further pressure is being applied to government – with a petition to improve tax solutions for the home service industry and create jobs – now available to sign via Change(dot)org.