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Treasury softens Heritage VAT blow

The Treasury has extended the period of tax relief on alteration works to listed buildings

The government announced plans in this year’s Budget to levy VAT on alterations to listed buildings as it does with repairs.

But it put in place transitional arrangements allowing schemes under contract at the time of the Budget to escape tax until March 2013.

Now it has bowed to pressure and allowed all those projects that had applied for building consent before Budget day in March 2012 to pay no tax until April 2015.

The Treasury document said: ‘The government will amend the transitional arrangements to make them more generous and provide relief to more projects already underway at Budget by specifying an earlier trigger point for projects to benefit from transitional relief and by extending the length of the transitional period.’

Historic organisations umbrella group The Heritage Alliance in March described the Budget announcement as a ‘shock decision’ which jeopardised the future of heritage buildings.

RIBA Conservation Group chair Robert Franklin added at the time: ‘There is a real concern from the RIBA that the planned increase from zero to 20 per cent VAT for alterations to listed buildings could have a debilitating economic impact on development in the historic environment.’

Donald Insall Associates chair Nicholas Thompson said the concession failed to go far enough, suggesting the levying of VAT on alterations to historic buildings could lead to a surge in applications to de-list Grade II buildings.

He said: ‘This additional tax on heritage is essentially destructive of what legislation seeks to protect and surely can’t be justified by a wish to raise revenue from the rich who wish to building swimming pools in or within the curtilage of their listed buildings.’ 

He added: ‘What about those who build new swimming pools that are not associated with listed buildings? Many buildings not listed in their own right fall with in the curtilage of a listed building and are, therefore, subject to listed building consent.  Perhaps a compromise might be that work to new or existing structures within the curtilage of a listed building should not be exempt, but work to the listed buildings themselves should?’

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