Anger at VAT rise for work on listed buildings

4:00pm Wednesday 18th April 2012 in News

VAT WORRY: Rev David Hassell outside St Mary’s Church, Kempsey, near Worcester, which is a grade one listed building (16017601) Buy this photo »

A CONTROVERSIAL new “heritage tax” on listed buildings has been panned in Worcester – with angry church leaders and politicians calling for it to be axed.

From October, the owners of grade one and two listed buildings will have to fork out the full 20 per cent VAT rate on any upgrade work or alterations as part of the Government’s Budget.

But campaigners want it scrapped, with critics saying it would discourage improvements on some of the city’s most historic properties.

Rev David Hassell, assistant minister at St Mary’s Church in Kempsey, near Worcester, a grade one listed building, said: “In June we are spending £50,000 on two new bells to coincide with the
Queen’s Diamond Jubilee.

“For us this is a huge amount of money and if we paid VAT on it, we would not be able to do it.

“It would be completely unaffordable. We get limited funds as it is.

“We are not happy about this. We’ve spent a lot of money on the church recently, £170,000 over the last few years, but we’d be unable to do any more.”

His concern has also been echoed by Councillor David Wilkinson, the city’s historic environment and design champion.

“This might discourage the owners of listed buildings from spending money, that’s the downside of this,” he said.

“Another concern of mine is that it could make owning a listed building less attractive because it would come at a cost.”

Worcester MP Robin Walker said: “I’ve had letters about this from a few constituents and have raised it with the Treasury as it’s a fair point.

“The general context of it is right as people living in listed houses should not be exempt from VAT while those living in a normal house do pay.

“But there could be special protection for places of worship.”

Worcester has 931 listed buildings including the Guildhall, the Deanery, the Cathedral, Powick Old Bridge, the Commandery and many more including homes,
gates and churches.

At the moment, owners only incur VAT on minor repairs such as roofing but not on any alteration, improvements or restoration work.

The Government believes the change will raise £450 million over the next five years.

A spokesman for the Treasury said: “It is not right that a church already pays VAT on repairs but a millionaire can stick a swimming pool in his listed mansion, VAT free.

“This corrects this anomaly in the VAT system.”

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