Historic England has called on the government to slash VAT on renovation in a bid to remove a major brake on retrofit work
Just weeks before new chancellor Rishi Sunak announces his 2020 budget, the government’s heritage watchdog and adviser has made a public demand for the tax on refurbishment, currently set at 20 per cent, to be reduced.
The plea echoes the central plank of the AJ’s RetroFirst campaign – and follows a similar call from the RICS. Historic England announced the demand alongside the release of ‘game-changing’ new research into the embodied carbon of the nation’s existing built heritage.
The study, There’s No Place Like Old Homes: Reuse and Recycle to Reduce Carbon (see attached), forms part of the organisation’s wider drive to end the ‘fast fashion for buildings’ and to encourage retrofitting of existing stock instead. It urges a new approach to be taken to ‘managing change to the built environment’ and says steps must be taken to ‘prioritise our existing buildings by making refurbishment and reuse of existing buildings worthwhile, compared to knocking them down’.
Speaking out about the discrepancy between tax on new-builds and refurbishment, a spokesperson said: ‘The heritage sector has long argued that the current application of VAT is a disincentive for the custodians of our historic environment to invest in and care for much-loved homes.
‘[The Building Better, Building Beautiful Commission made a similar recommendation in their report. With growing evidence that reusing buildings would be a way to decrease our carbon footprint in the face of the climate crisis, it’s clear to us that the current VAT system needs reconsidering.
‘We are drawing government policy-makers’ attention to the evidence for and against change to the system.’
The move was welcomed by heritage campaigners. A spokesperson for the Victorian Society said: ‘It is great news that Historic England is now also calling for VAT on retrofits to be slashed.
‘Taking into account the issue of embodied energy in buildings and the mounting climate emergency, this is an increasingly urgent issue for the government to address.’
There’s No Place Like Old Homes was drafted for key stakeholder group the Historic Environment Forum. It also includes a wealth of data that Historic England says must become a key factor in decision-making if the government is to meet its target of being carbon neutral by 2050.
The report calls, in particular, for a rethink of how inbuilt energy is measured and a move towards a whole-life carbon approach. The organisation said: ‘[By] not counting embodied carbon, we underestimate the entire carbon emissions of a new-build by up to 31 per cent.
‘Compared to refurbishing a traditional Victorian terrace, a new building of the same size produces up to 13 times more embodied carbon.
‘This equates to around 16.4 tonnes of CO₂, which is the equivalent of the emissions released by driving 60,000km, or 300 times round the M25, in a large petrol car.’
Historic England’s chief executive Duncan Wilson said: ‘Recycling plastic bottles is a normal part of our daily lives, but reusing our existing historic buildings would be a much more powerful way to improve our environmental impact. Despite this, reusable buildings are demolished every year and new buildings, which require a huge amount of carbon to build, replace them.
‘Investigations need to continue, but the results from this year’s Heritage Counts report show that reusing and responsibly upgrading historic buildings is good for the environment and essential to meet our ambitious carbon targets.’
Hisdtoric england carbon comparison
Recommendations: meeting net zero
1. We must encourage longer lifespans in buildings through refurbishment and repair and maintenance. However, the UK’s VAT system disincentivises refurbishment and repair and maintenance while incentivising new development. Current VAT rules on construction are out of date and stand in the way of reducing UK carbon emissions. Changing VAT rules to encourage the reuse of buildings is the best way to start making that change to meet our 2050 targets.
2. Climate change is the single most important issue of our time, and buildings are a key source of greenhouse gas emissions driving climate change. The government, research councils, professional bodies and industry should create a joint platform/a centre for scientific research and excellence that aims to understand and share information, guidance and evidence on what works and what doesn’t work for reducing carbon in buildings; in particular in existing buildings, which constitute 80 per cent of all buildings that will exist in 2050.
3. We must focus on using and reusing our historic assets to fully exploit the opportunities that already exist. If we reuse what is already here, we can avoid emitting carbon – embodied carbon accounts for up to a third of the carbon emissions of a new building.
We must count and measure carbon in buildings more accurately
Historic buildings are a constant source of new homes through conversion and change of use, but there are many assets that are under-used, vacant and at risk of demolition. The heritage sector needs to identify and quantify the opportunities for reuse available in the built historic environment.
4. We must count and measure carbon in buildings more accurately, only then will we take the right actions to reduce carbon in the built environment. The design and development of an ongoing data collection programme is needed to address the data gaps uncovered in this year’s research.
5. The development of a life-cycle assessment methodology that can be applied to refurbishment projects for historic buildings without the need for bespoke, technical research such as that of the Heritage Counts 2019 research is necessary if we are to make informed decisions on how to reduce carbon in the built historic environment
6. A whole building solution must centre on the users of buildings. To reduce carbon in buildings we must change behaviours of occupiers. This year’s Heritage Counts research has highlighted how difficult it is for non-technical users to access the existing evidence base and information.
The heritage sector will need to work closely with industry, policy, regulators and professional bodies to empower non-technical occupiers and custodians of historic assets to make the right decisions for themselves and their buildings. Ready access to bespoke, non-technical information, advice and guidance is needed, as well as access to skilled professionals.
7. We must encourage retrofit through guidance, advice, new research and innovative practices. The heritage sector must continue to disseminate advice and guidance but must also work with partners to develop new dissemination channels and audiences for its best practice advice and guidance.
RetroFirst Logos 2019 3