Loyd Grossman: ‘VAT system taxes heritage’
Television presenter, gastronome and chairman of The Heritage Alliance Loyd Grossman says why government should reduce VAT on retrofits
Explain briefly what you are hoping to achieve and why?
Our country is celebrated for the richness and beauty of its built heritage, so it verges on crazy to have a VAT regime which discriminates in favour of new building and against the repair, maintenance, adaptation of older buildings [normal 20 per cent tax rate]. The way the VAT regime works now is a tax on heritage. HM Treasury perhaps has the mistaken belief that listed buildings are the prerogative of the rich, but 86 per cent of people living in listed buildings belong to socio-economic grades B, C1, C2, D and E. Private owners of listed buildings rarely benefit from the Heritage Lottery Fund or English Heritage funding - nor can they claim VAT back like commercial companies.
The way the VAT regime works now is a tax on heritage
Yet, we expect them to keep their properties in good order for the national benefit. As chair of The Heritage Alliance, I want a VAT system that promotes and defends one of our greatest national assets: the historic environment.
Do you want VAT dropped to 5 per cent for all refurbishment work - or just on listed buildings?
Because of European Commission rules, once a zero-rating has been withdrawn, it can’t be reinstated. But a 5 per cent rate could be introduced for domestic buildings. It is also worth looking at the success of the Listed Places of Worship grant scheme which has done a great deal of good for our historic religious buildings by encouraging maintenance, repair and sympathetic alterations. Why not try extending that to other building types?
Why do you think the government ditched the VAT exemption in the first place?
The government wanted to remove what they felt was an anomaly in the VAT system. They felt that too many rich people were gaming the system. Our research and evidence from a Freedom of Information request found that such economic arguments were pretty weak.
Political will to change VAT is weak, but the economic and environmental arguments are strong
Do you think the message will get through?
It should do. We had plenty of support from MPs in 2012. Cut the VAT Campaign is bringing out some compelling new research in early March. I fear the political will to change VAT is weak, but the economic, cultural and environmental arguments are getting stronger all the time.
Do you think the existing historic building stock can help solve Britain’s housing crisis?
Britain needs more housing and much of that will have to be newbuild. But we should also make the best possible use of our existing housing stock. Refurbishment of older properties consumes fewer renewable resources and the global environmental benefits of maintaining older housing stock are significant.