VAT changes for listed buildings

A new way that VAT is charged on renovation projects of listed buildings is under fire by Labour politicians and by members of The Church. Approved alterations to listed buildings will now be liable to 20% VAT.

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  1. Juliet Bremner: ITV News Correspondent

Churches are the unintended victims of VAT changes

The Government claims its planned changes to the way VAT is charged on listed buildings is aimed at wealthy taxpayers - the sort of people who may want to install a swimming pool in their mansion, for example.

The problem is that they also managed to catch churches in the new rules, so work like installing disability ramps and community halls will become more expensive. Around two thirds of all listed buildings are churches.

This is, of course, the latest in a long line of negative headlines to come out of the Budget - from the 'granny tax' to the 'pasty tax'.


'VAT change may halt renovation of Wakefield Cathedral'

The Very Rev Jonathan Greener has said that planned changes to the way VAT is charged on listed buildings may bring renovation work on Wakefield Cathedral in West Yorkshire to a halt.

Speaking to ITV Calendar on March 27th, he said: "We want the Chancellor to rethink [and] to give us a longer consultation period".

The Very Rev Greener's wife has come up with a novel way of protesting against the changes with her 'VAT Ditty'.

Labour attacks new VAT on listed buildings

Plans made in the Budget for changes in the way VAT is charged on the renovation of listed buildings has come under fire.

The Government says that charging 20% VAT on renovation works simply removes an anomaly that used to cause confusion over the difference between 'renovation' and 'improvement.'

But Labour says it's creating another needless cost.

Deputy Labour leader Harriet Harman says it is going to cost churches and other heritage sites thousands of extra pounds a year.


VAT rise could cost The Church £20m a year

Budget changes to the way VAT is charged for improvement works could mean Churches pay more for building improvements

David Cameron is facing a backlash from the Church over a planned change in VAT for building repairs and alterations.

From October this year the Treasury will charge VAT on approved alterations to listed buildings. Currently this is exempt from the tax.

Building work is currently zero rated if it is an approved alteration to a protected building, but standard rated if it is an alteration to any other building or if it is a maintenance or improvement.

This means that, for example, repairing the roof of a listed dwelling is standard rated whilst adding an extension to a listed dwelling or installing an indoor swimming pool would be zero rated.

The new legislation will remove the anomoly but The Church and labour MPs claim that could cost the church £20m a year.

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