Michael
Levack, chief executive of the Scottish Building Federation,
said VAT avoidance was a major problem and called on
regulators to take action.
Levack's
comments follow allegations last week by the Office of Fair
Trading (OFT) that 112 UK construction firms have been
involved in price-fixing. Although the inquiry looked only at
English firms, a number of the firms named are involved in
major Scottish projects.
The
OFT alleges that companies who do not want to gain contracts
for which they are invited to tender obtain a "cover
price" from companies who want to win the contract. A
number of companies are understood to be co-operating in
return for leniency.
Levack
said he would find it "incredible" if there was any
evidence of wrongdoing here, but added that if the OFT chose
to investigate, the Federation "would give them every
support".
VAT
fraud by rogue traders is no responsibility of the OFT, but
Levack said it was a far more urgent issue. He said:
"Members of the public get a quote from a reputable firm
and it includes VAT. Then some guy comes along afterwards and
offers to do it cheaper for cash by losing the VAT.
"Legitimate
businesses do not want to receive cash. They do not want to
lose the VAT because they are paying out on materials."
So
