VAT on repairs and alterations to listed buildings

By Kevin Russell | 23 May 2012 | Comments (4)

Budget 2012 announced a proposal to remove VAT Zero Rating from approved alterations to listed buildings, many of which are churches. The main target of this measure must be people that live in homes that are also listed buildings who, for example, install a swimming pool in their home and have the work zero rated purely because their house is listed.


Churches and other charities have been campaigning since the Budget announcement to have the measure dropped in relation to buildings that are not private residences, but are used for public and community benefit. In an attempt to appease churches, the Government announced at the time, that the Listed Places of Worship Grant Scheme would be extended to include these alterations. The problem with this is that the LPWS only refunds a proportion of the VAT costs, dependent on the number of claimants and the funds available in any given quarter; 45p for each £1 of tax cost is not atypical.


Although only a partial solution, the Chancellor announced on 17 May that an additional £30 million p.a. will be added to the LPWS funding for the lifetime of the present Parliament which will enable VAT on approved alterations to be fully refunded to churches. Claims will be able to be made monthly. Whilst this is a welcome development, it will only provide a temporary reprieve for churches as there is no guarantee that the additional funding will be extended beyond the current Parliament. Nor is there any solution on the table for other charities that occupy listed buildings.  So, the campaign for removal of the measure continues.


Another, more important point is that the removal of a VAT zero rate is a one-way street. European law means that it can never be restored. Yet the Government seems willing to voluntarily surrender a valuable charity relief. It is therefore very concerning that it has made this proposal. We would be interested to hear from any churches or charities who have listed premises. Please contact [email protected]. We will then make any appropriate representations to HMRC and the Treasury on your behalf.



VAT property
Website Design and Content Management System by Adept Digital