We are demolishing our old parish room to rebuild a
newer one for a number of reasons, one of which is to provide
disabled access to the hall, and to the only lavatories on our
site. It is, and will remain, a completely independent building -
albeit five feet away from the church, which qualifies under the
Listed Places of Worship (LPW) grant scheme. Am I right in assuming
that the whole of the new building will qualify for VAT zero-rating
anyway, and we should not expect to claim through the LPW grant
scheme? But would the design work, architect's fees, etc.,
regarding the new building also qualify for
THE subject of VAT keeps coming round. New buildings, in
general, are zero-rated for VAT. Double- check with your
architect/project manager about how the zero-rating will be
handled, as it is a question of the contractor's not including VAT
on the invoices.
Before the contractor gets under way, there will be an exchange
of letters assuring the contractor, who does not want to fail a
later inspection by the VAT person, that he or she is doing the
right thing in not charging VAT. You get your zero-rating only if
it does not get invoiced. Clear up this process early on, as you
have no right to claim back any VAT paid in error.
The architect's fees, and those of others on the design team,
are not zero-rated on new buildings; so you will be charged VAT,
and cannot reclaim it through the LPW grant scheme. This is
important to your budget for fund-raising.
Disabled facilities are also zero-rated in old or new buildings;
so, when congregations are preparing to install lavatories in the
church, those elements that are accessible to the disabled,
including items such as ramps, are zero-rated, and will need to be
identified before the works begin (as above), and the contractor
will not charge VAT on those elements of work. The balance of any
work inside the church then comes under the usual parameters of the
LPW grant scheme.
When you are fund-raising, it is best to include the VAT in all
your indicative and draft budgets under expenditure, and show the
appropriate amount under income, alongside other grants. This gives
you an idea of what you are going to have to pay out, even though
you will get it back in due course.
When you apply for your VAT reclaim, more information is needed
now than used to be the case, anda works budget should be supplied,
together with more breakdown on what each invoice covers, to ensure
that all elements are eligible under the scheme.
As with grant schemes such as the Heritage Lottery Fund and
Landfill Community Funds, collecting the extra details requested is
arduous, but they are probably required by auditors.
Send your issues and questions to