Clouds with silver lining?

The floods last summer not only cost residents their homes for many months, the Government some £86 million in grants towards repairs and insurance companies massive payments, they also produced a bonus for taxpayers.

It now seems that in the repairs undertaken, on average the VAT bill for each house was somewhere between £5,250 and £7,000. In many cases the VAT bill will have been met by the insurance companies, and not by householders, so that's alright then. The bills will result in higher insurance premiums, so we shall all lose ultimately.

The one gainer, the one silver lining, is for the Treasury and the Chancellor. If the Taxpayers Alliance calculation is correct the Treasury gained £525 million from VAT on the costs of repairing and refurbishing houses damaged by the floods. So even allowing for the £86 million grants, the Treasury still gained by well over £400 million. This is not to mention the VAT on reinstatement of damaged household goods.

There is a silver lining, - for the Chancellor, who can offset the VAT receipts against the massive sum he will have to borrow this year to balance the books.