Unexpected changes in the Chancellor's recent budget saw the removal of the zero VAT rate for alterations to listed buildings.
Previously, while repairs on listed buildings
have always been subject to full rate VAT, if the work planned fitted the
definition of an alteration, providing it had been granted listed building
consent and neither deemed a repair or maintenance, it qualified for zero-rate
This change will cost the Church of England up to
£20 million per annum on works to its 12,500 listed church buildings, assuming
of course parishes and cathedrals can now afford to go ahead and undertake the
This is a real blow to communities who are
seeking to maintain and develop their churches (including improved lavatory,
kitchen, disability and energy saving facilities) to enable churches to be more
widely used by the community.
The 20 percent VAT charge will also negatively
impact bell hanging and organ building, both traditional craft industries, where
some schemes currently enjoy zero rating.
If your church or listed building is thinking of
carrying out alterations then now is a good time to commence the work. For
example, the measure affects the fitting of an autowind unit; placing an order
before the 1 October deadline could save your Church up to £1000*
(*£1000 average price saving subject to site survey, Faculty approval and our
standard T & C’s).
The day after the Budget the Bishop of London and
Second Church Estates Commissioner wrote to the Chancellor asking him to keep
alterations to listed churches zero-rated.
The Church of England has created an e-petition
calling on the Chancellor to bring back zero rate VAT to alterations to the C of
E’s 12,500 listed churches. It follows the recent launch of a consultation by HM
Revenue & Customs on VAT charging to approved alterations to listed
buildings, which closes on 4 May 2012. The e-petition can be signed online now