Thinking Anglicans

VAT on alterations to listed places of worship

Updated Friday morning

I have written about this earlier here, here and here.

But today the Church Times reports that We will cover your whole VAT bill, says Osborne.

The Government is to find an extra £30 million a year to help repay the VAT bill on alterations to listed places of worship, it was announced today. The move marks a sig­nificant concession after zero-VAT rating for alterations was removed in the Budget. …

And the Church of England has this press release: Government agrees £30 million extra to resolve VAT concerns.

Updates

The Hansard record of the Chancellor of the Exchequer’s announcement in the House of Commons

Richard Chartres in the Church Times Saved by the churches’ service

The Telegraph Osborne unveils £30m package to help churches

BBC Church of England welcomes money to offset VAT on alterations

James Chapman in the Mail Online Osborne in £30m heritage tax U-turn: Compensation fund to relieve burden on churches

ITV News VAT help “doesn’t go far enough”

The Heritage Alliance The Heritage Alliance responds to the Chancellor’s announcement.

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Erika BakerIan BlackMartin Reynolds Recent comment authors
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Martin Reynolds
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Martin Reynolds

What an interesting and fairly detailed account of how policy is changed.

Ian Black
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Ian Black

Am I alone in wondering if the intention is to fully cover the VAT charged by a grant from government funds drawn from tax receipts, why charge the VAT in the first place? This is ludicrous. What a waste of everyone’s time, effort and money, including Civil Servants’.

Erika Baker
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Erika Baker

You charge VAT in the first place because then you have the payment system in place and it will be much easier to gradually erode the grant over time.

Erika Baker
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Erika Baker

If I understand the new system correctly, it is not the case that all VAT will be reimbursed but that as a fixed amount of money will be released to reimburse churches for VAT. Depending on how many undertake reordering projects and how expensive they are (I believe Wakefield Cathedral’s VAT bill alone is £2m), some churches will only get back around 40% of their VAT outlay. The details don’t seem to be fully agreed as yet, but the devil certainly appears to be in them!