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 on qualification.

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 contractor.

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 rebecca.payne@c-of-e.org.uk.

ROY THOMPSON
Churchwarden and member of General Synod
May Rose Cottage, Sheriff Hutton
York YO60 6SS