VAT ON renovations of and repairs to modern church buildings could be cut by more than two-thirds within two years, under a European Commission directive that the British Government “strongly supports”. But listed buildings could end up having to pay more.
Under pressure from the UK, the EC has issued a directive asking that churches should be eligible for reduced rates of VAT. At the moment, the Government refunds VAT on listed buildings, but does not provide VAT help for unlisted ones.
The EC proposal would allow the Government to reduce VAT to five per cent on “the renovation, repair, alteration, maintenance and cleaning of housing and of places of worship and of cultural heritage and historical monuments recognised by the Member State concerned”.
“The Government is very keen on these changes,” a Treasury spokesman said on Monday. “It has been looking for this for several years. The UK already has the widest range of VAT exceptions.”
The EC has urged that the changes be made by 2010, and the Whitehall spokesman said that they could be in place by then. “But there is a long way to go yet. All 27 member states have got to agree.” It was too soon to know whether listed churches would end up having to pay more VAT on repairs, if they no longer had a rebate from the Government, he said.
“There would be an overall net reduction of the rate of VAT from 17.5 per cent to five per cent. The UK has strongly advocated the availability of a reduced rate of VAT for the repair and maintenance of listed places of worship and memorials. . .
“These buildings often require costly specialist repairs, which weigh heavily upon small congregations and other groups, with many of the wider beneficiaries contributing little or nothing to the cost. A reduced VAT rate for such repairs would lessen this burden.”
Crispin Truman, the chief executive of the Churches Conservation Trust, said that initial figures suggested that it stood to lose at least £250,000 after 2011 if the rebate was discontinued entirely, and £150,000 each year, if VAT was reduced to five per cent. |
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