Saturday, 14 April 2012

Budget 2012: VAT to be charged at 20 percent on alterations to listed churches

Updated Tuesday morning

The Chancellor of the Exchequer announced in his budget on 21 March that value added tax (VAT) (at the standard rate of 20%) will be extended to alterations to listed buildings. This will particularly affect the Church of England, which issued this press release.

Statement on Budget 2012: VAT to be charged at 20 percent on alterations to listed churches

Unexpectedly the Chancellor announced in the Budget that approved alterations to listed buildings - which, unlike repairs and maintenance are currently zero-rated - will be charged at the standard rate of 20 percent. This will cost Church of England congregations up to £20 million per annum on works to its 12,500 listed church buildings, assuming of course parishes and cathedrals can now afford to go ahead and undertake the works required.

This is a real blow to communities who are seeking to maintain and develop their churches (including improved lavatory, kitchen, disability and energy saving facilities) to enable churches to be more widely used by the community. The 20 percent VAT charge will also negatively impact bell hanging and organ building, both traditional craft industries, where some schemes currently enjoy zero rating.

The day after the Budget the Bishop of London and Second Church Estates Commissioner wrote to the Chancellor asking him to keep alterations to listed churches zero-rated.

The accompanying Treasury Document also stated that the Government was ‘extending’ the scope of the Grant Scheme administered by the Department of Culture, Media and Sport to include alterations. It did not; however specify any increase in funding of the scheme. Without a cash increase to the Listed Places of Worship Grant Scheme, which is already inadequate to cover all repair claims, the current scheme will simply be divided into even smaller amounts among a larger group of claimants. So, far from being additional help for churches, the effect of the extension will be to reduce the proportion of the VAT costs refunded for repairs and maintenance…

Subsequently there have been these two further CofE press releases.

Sign the e-petition to bring back zero rate VAT on alterations to listed churches
Going for a song: CofE YouTube recording calls on Government to bring back zero rate VAT on alterations to listed buildings

There was not a lot of press reaction to this initially, but recently the media have been taking more interest in this tax change.

Mark Hughes in The Telegraph Budget 2012: VAT increase on listed buildings will ‘discourage improvements’
Niki May Young for Civil Society Media Church of England faces £20m annual tax bill following Budget
Madeleine Davies in the Church Times Outcry as Church faces £20-million extra VAT bill
Niki May Young for Civil Society Media Church petition against VAT on alterations surpasses 10,000 signatures
The Telegraph Labour urges rethink on VAT for work on listed churches
Daily Mail Cameron faces revolt from his local church pulpit over £20m Budget tax raid
Jason Beattie in The Mirror Tories face the wrath of God after slapping VAT on church alterations
Luke Heighton in The Sun Fury at Tory ‘stealth tax’ on churches
Chris Mason for the BBC VAT rise ‘could jeopardise Church renovation projects’ and Fears VAT ‘may halt church repairs’
ITV News VAT changes for listed buildings


From the Church in Wales Archbishop petitions against “heritage tax”

Posted by Peter Owen on Saturday, 14 April 2012 at 3:34pm BST | TrackBack
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Categorised as: Church of England | News

It isn't just churches, but anyone who has the care of a listed building who is potentially facing a problem. Our local authority, for example, has an unused listed building which needs to be brought back into use - that may well involve some alterations, when it eventually happens. There has been no money for this so far, and budgets are tight.

Do open your eyes to local issues and make common cause with others on this if you can.

Posted by: Mark Bennet on Saturday, 14 April 2012 at 5:33pm BST

If the bishops proclaimed the Resurrection with as much vigor as they attack this budget proposal the church would not be in decline. if they had spoken up of the ordinary people when the Tories attacked them, they might attract more sympathy now. I do not understand why all this money is being spent on Wakefield cathedral in view of the pending dissolution of the diocese. Even after these changes the CofE enjoys unique privileges which it has not earned

Posted by: David on Tuesday, 17 April 2012 at 1:47pm BST

I'd be interested to know what these "unique privileges" are. With the single exception of the automatic places for Bishops in the legislature (in itself not a straightforward privilege, since the legislature has a role in the CofE's internal affairs in a way it does not with any other religious body), I can't think of any. And of course our parishes don't in general benefit from public funding.

Posted by: Philip Hobday on Wednesday, 18 April 2012 at 5:19pm BST

"Unexpectedly the Chancellor announced in the Budget that approved alterations to listed buildings - which, unlike repairs and *maintenance* are currently zero-rated"

"This is a real blow to communities who are seeking to *maintain* ... their churches"

(my emphases)

How is it a blow to communities seeking to maintain their churches when maintenance remains zero-rated?

Posted by: Laurence C. on Wednesday, 18 April 2012 at 5:33pm BST

For a start the church will have received the lion's share of the £23m made available through the Heritage Lottery Fund

Posted by: David on Thursday, 19 April 2012 at 9:39am BST

Just re-read my own post. Doh!

Go to the back of the class, Laurence C. :-)

Posted by: Laurence C on Thursday, 19 April 2012 at 2:59pm BST
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