New law hits Kingston church redevelopment with £459,000 tax bill

8:10am Sunday 29th April 2012 in Kingston

By Tom Barnes

New law hits church plan with £400k tax bill

An ancient church planning a major redevelopment will be hit with a £459,000 tax bill thanks to new Government tax laws.

The removal on VAT exemptions on alterations to listed buildings means All Saints Parish Church in Kingston will have to find the cash when renovation work begins in November.

Plans at the 1,000-year-old church include building a community centre, refurbishing and renovating the church and giving the grounds “a going over”, at a cost of £8.7m.

The Chancellor George Osbourne proposes to abolish zero VAT for alterations to listed buildings meaning protected building will be charged at the standard rate of 20 per cent from October.

Mr Osbourne claims the majority of work covered by the zero VAT relief consists of extension work not necessary for heritage purposes.

The plans were aimed at alterations to listed houses, but Reverend Jonathan Wilkes said it would have serious consequences for listed places of worship.

He said: “This sudden increase in cost – so late in the day for us in terms of the five years of so of consultation, planning and preparation that we have been engaged in – comes as a serious
problem to be addressed. “Ours is a project that will and must be fulfilled for the people of Kingston but, if this proposal is seen through, it will make our task much harder.”

A spokesman for English Heritage said the plans could have a negative impact on places of worship but did point out those churches could apply for Government grants.

He said: “We recognise there is also a potential negative impact on private owners, charities and places of worship.

“We are currently seeking clarity on a number of detailed issues with HMRC in order to make a full assessment of the impact of the proposed changes.

“In the case of places of worship, the Government’s listed places of worship grant scheme provides grants towards the VAT currently paid on grant-aidable repairs.”

HMRC said money was available via a Department for Culture, Media and Sport scheme, to help places of worship recover the VAT on repairs.

To join a petition against the changes please visit epetitions.direct.gov.uk/petitions/32229.

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