VAT Double whammy for parishes with listed churches!

04/04/2012

Advice from Inspired North East:

2012 may be a golden year for UK Olympics but it is becoming a poor year for Listed Churches and VAT.

VATIn addition to increases in VAT from 17.5% to 20% and the recent shock discovery that the amount Listed Churches can recover under the Government’s LPWGS fund may be as low as only 46%, a further VAT burden has now been added by the recent Budget.

From 1st October 2012 any new improvement work of extension or reordering to Listed Churches (as well as to all other Listed Structures) will also be subject to standard VAT too, whereas this work was zero rated previously! So, this means that from the autumn, all Grade I, II* and II churches will be required to pay 20% VAT on repairs AND on all new building and improvement work.

Although this additional VAT may also be reclaimed via the LPWGS fund, as yet there have been no assurances from the Government that the amount available under this scheme will be increased to reflect the huge growth in demand that the new VAT changes will mean. This will certainly only add to the current uncertainty of many churches as to how much VAT they may be able to recover.

As the Anglican Church is responsible for 12,500 listed churches, approaches are being made nationally to the Government to see if churches can be excluded from this extension of the VAT regime or, if this is not possible, for additional funds be provided for the Vat recovery scheme.

In the meantime, Inspired North East’s advice to Listed Churches is:

a) if you have new work in hand, try and get as much done before 1st October to reduce your VAT payments to a minimum, and

b) if you are planning repairs and/or new work, it may be wise to assume you may only recover a low percentage of the VAT – say about 20 to 25% - and pitch your fund-raising target to cover the balance of non-recoverable VAT.

If you have any further queries about the changing VAT regime, please get in touch with us at Inspired North East on 0191 270 4116 or InspiredNE@newcastle.anglican.org .

 

 

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