Churches welcome VAT lifeline

Buy photos »

COMMUNITY leaders have hailed a £30million government lifeline which could see churches escape controversial VAT charges on improvement works.

Dr John Inge, Bishop of Worcester, welcomed the announcement from Chancellor George Osbourne that cash would be made available for churches affected by the so-called ‘church tax’.

From October, the owners of grade one and two listed buildings will have to pay the full 20 per cent VAT rate on any alterations.

But of the grade one listed buildings in England, almost half are Church of England churches and most of them are medieval which makes their maintenance, repair and alteration very expensive.

Local churches or cathedrals which wanted to make alterations such as building a kitchen or toilets would have to find money to pay the 20 per cent VAT on top of the building costs.

Bishop John was among many church representatives who strongly opposed the plans and called for a rethink from the Government.

But instead of dropping the plans, Mr Osbourne unveiled a £30million fund to compensate churches which wanted to carry out renovations.

Bishop John said: “I am delighted with this news. Whilst zero VAT would have been our preference, the Government’s action goes a very long way towards meeting our concerns. Our aim as the church is to serve society and this will enable us to continue to adapt churches for more use by their communities,” he added.

Droitwich’s MP Peter Luff also welcomed the decision and said: “I am really pleased that the Government has been able to find a sensible solution to this issue.

“It’s right that millionaires who want to put swimming pools in their listed properties should pay VAT. But it wasn’t right that hard-pressed church congregations should be penalised for doing the right thing.

“This significantly increased grant should ensure that churches of all denominations aren’t deterred from making important alterations to listed buildings because of the VAT bill.

“This will help keep a vital part of the nation’s heritage accessible and well maintained,” he added.

Regional news »