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Angry Bishops battle government over VAT on listed buildings

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Pressure is mounting on the Government to rethink its decision to introduce VAT on alterations to listed buildings.

This week the Church of England, which estimates the move could cost an extra £20 million a year to maintain its 12,500 listed church buildings, launched an e-petition urging the Treasury to ditch the plans, due to come into force in October.

The online petition has already been signed by more than 15,800 people.

The Bishop of Southwark, Christopher Chessun, told the Evening Standard that the 20 per cent VAT extension would ‘cause a great deal of difficulty for those caring for the nation’s heritage’ while the Bishop of London, Richard Chartres, has written to chancellor George Osborne demanding that places of worship were specifically excluded from the new VAT regulations.

Jane Kennedy, chair at Purcell Miller Tritton said: ‘The survival of churches like that of many other listed buildings depends on public engagement in their on-going use and long term care. 

As such they need to be adapted to meet the changing needs of users within contemporary society.  An increase of 20 per cent in cost, whether on a small intervention like a new lift or a larger scheme such as an education centre, could mean that many schemes may not go ahead. ‘

Country Land & Business Association president said: ‘The Government’s shocking new raid on owners of listed buildings will take an extra £125million in tax from Britain’s heritage. 

‘By scrapping the zero rate of VAT on alterations to listed buildings and refusing to reduce the 20 percent rate for repairs, the Chancellor has removed the only remaining advantage of having a building listed.’

Sign the e-petition here.

Postscript - 19 April - written answer in Parliament

Architecture minister John Penrose’s response to the question - ‘What assistance are you planning to provide to owners of listed buildings who are not eligible for the listed places of worship grant scheme, following the changes to VAT charged on approved alterations.’

‘English Heritage provides a wide range of advice and support to owners of listed buildings and their various associations; details are available on their website.

Financially, Governments have not historically provided support (apart from churches through the Listed Places of Worship scheme) for repairs or maintenance of listed buildings, which have long been VAT-able at the same rate as non-listed structures.

‘Instead, owners of listed buildings used to enjoy a VAT exemption for alterations (such as loft extensions or new conservatories) while everybody else had to pay VAT for the same work on an unlisted property. This created a perverse incentive for listed building owners to alter and modernise their properties rather than maintain the rare or beautiful old structure which was, of course, the reason why it was listed in the first place.

‘The Budget puts these anomalies right. We have no plans to spend any more taxpayers’ money by recreating them in some other way.’

Details of the e-petition demands

Bring back zero-rate VAT on alterations to listed churches

Responsible department: Her Majesty’s Treasury

We the undersigned urge the Chancellor to reconsider the extension of the standard rate of VAT (currently zero rated) to alternations to listed places of worship. This will have the effect of penalising the Church of England’s 12,500 listed cathedral and church buildings, almost entirely maintained by volunteers and voluntary giving, who are currently altering their buildings to make them suitable for use by the wider community. The extra cost this will impose will seriously threaten the continuation of such works. Extending the remit of the Listed Places of Worship Grants Scheme, with no additional funding, will go no way to mitigating this. It merely means a shrinking pot will be stretched even further.

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