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.
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”