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VAT rates on historic-building repairs could be slashed

A groundbreaking decision by the European Commission could open the door for changes to the VAT rules on repairs to historic buildings.

The new EU Directive, which has yet to be adopted by member states, could allow the UK to apply a reduced VAT rate to work on ageing buildings and monuments.

Campaigners have long claimed the current policy has meant it is often cheaper for developers to knock down and replace deteriorating gems – new-build is VAT-exempt – than to refurbish them (AJ online 01.03.07).

Under the present regime, the only exemption to the full VAT rate is the Listed Places of Worship Grant Scheme, which allows for tax refunds on repairs to listed religious buildings owned by charitable bodies.

According to Heritage Link, the directive could ‘remove what most consider is the single greatest barrier to the proper maintenance and repair of our historic assets’ by giving member states more autonomy ‘in setting reduced rates for certain local services… where these do not affect competition across the EU.’

Heritage Link, as part a working group called Heritage at the Heart of Communities, is expecting to meet with the Department of Culture Media and Sport shortly to discuss the future options and the way forward with the Treasury.

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