Mr Baldry said yesterday that the Chancellor had made clear he was “very keen”
to find a solution and spoke of plans to “separate out” churches from other
possible targets for the tax.
Treasury sources confirmed that in addition to extra money for church projects
recently announced, a full VAT exemption for church buildings is under
consideration.
Mr Baldry said: “I am confident that the Chancellor is very keen to try to
find a solution that would be satisfactory to the Church.
“I think he acknowledges that for alterations that the Church is trying to
make, our churches and cathedrals are increasingly adaptable for the Big
Society.”
He added: “I think what he is keen to do is work out how he can separate out
churches from other things which he is trying to deal with – for example
rich people living in grade one listed properties putting swimming pools in
their gardens and getting the VAT back on it because they happen to be in
listed buildings.
“I think we all recognise that that is an abuse and we all recognise that
there is a boundary that needs to be protected and I think the Treasury and
the Church are at one on this in that regard.
“It is now finding a route forward which is straightforward and not
overcomplicated.”
Janet Gough, director of the Cathedral and Church Buildings Division of the
Archbishops’ Council, said: “The Church understands the Government’s wish to
close unfair tax loopholes for owners of listed houses – who may want to
install swimming pools – but the provision of zero-rated VAT for alterations
to listed places of worship is not a tax loophole. It is the Big Society in
action.”
A Treasury spokesman said: “The Government is committed to ensuring that
listed places of worship are not adversely affected by the Budget proposal
and we are actively exploring options with the church authorities.
“We have already committed to expanding the listed place of worship
scheme by £5 million per year, but it’s clear we will need to go further in
order to address the impact on churches and other places of worship.”