VAT and alterations to listed church buildings

3 July 2012

VAT and alterations to listed church buildings photo


HM REVENUE AND CUSTOMS has announced new transitional arrangements for alterations works to listed cathedral and church buildings.

Projects will continue to benefit from zero-rating if a faculty (or approval under the Care of Cathedrals Measure) had been applied for by Budget Day, 21 March 2012. The original arrangements specified that only works that had a signed contract would qualify.

The end of the transitional period will also be extended until 30 September 2015, allowing qualifying projects to continue to benefit from zero rating for 3 ½ years, or 4 summers. This should ensure that the majority of qualifying projects underway at Budget Day, 21 March 2012, will qualify for transitional relief, nevertheless it would be prudent now to proceed without delay with alterations that have permission in place.

The new joint repairs/alterations Listed Places of Worship Grant Scheme will come into effect 1 October 2012, when the equivalent of the full VAT payment will be claimable on all eligible repairs and alterations. The disadvantage of the new scheme is that VAT will have to be paid and then re-claimed. But it will now be repaid on a monthly basis (not quarterly as at present) and the present uncertainty will be eliminated so that parishes and cathedrals can budget on the basis that the full VAT paid out on their alterations and repair bills will be repaid.

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