Sir, - Unless I have misunderstood the report by Bill Bowder ("Parish
frustrated by 'asinine' VAT rules",
7 April), the problem seems to be a confusion between two quite different
sets of rules, which cover (1) new work (alterations), and (2) repairs.
Zero-rating approved alterations to protected buildings applies to
any listed building to be used for any "relevant charitable purpose", and is
covered under the quoted Notice 708. In this case, the builder, not the client,
applies the zero-rating to his VAT accounts. The project architect will be well
aware of the conditions, and will supply the notice to the contractor to
present to his VAT office.
The notice refers to the example of replacing a boiler at the same time as
extending the heating system as being an alteration, which would be
zero-rated. It should be a simple task to obtain a ruling from the VAT office
The same notice in 9.3.3 refers to the "Listed Places of Worship Grant
Scheme", so tirelessly worked on by the Church of England VAT Group, which
applies to churches (and similar) only. This separate scheme allows
churches, as clients, to reclaim VAT already paid for certain
categories of repairs to the fabric.
The rules changed in 2004, and again in this year's Budget, both in the
level of VAT rebated, and also in its extension to fees and memorials and
fittings, including bells, pews, clocks and organs. The Chancellor also
extended the scheme until 2011.
Churches have reclaimed nearly £34 million in VAT, but many qualifying
churches have made no claims, for work carried out, using a procedure that is
extremely simple, and where the rebate is paid very quickly. The scheme allows
a reclaim of VAT paid to contractors, tradesmen, or suppliers of qualifying
goods and services, including scaffolding, on one or several jobs carried out
in the year. The claim is made by an officer of the church, not by the
The report from the Church Heritage Forum
Building Faith in the Future is intended to demonstrate to government
agencies the cost of repairs and alterations to the Church, but, more than
that, the value of the buildings and man-hours delivered to the country through
education, culture, social care, and tourism.
We always hope the rules for grants and tax allowances will be simplified,
but for now we must work effectively within them. New information is published
by the Cathedrals and Church Buildings Division through the email group
Churchwarden and member of General Synod
May Rose Cottage, Sheriff Hutton
York YO60 6SS