HM Treasury has offered to provide £30 million a year in extra funding for the alterations and repairs to listed buildings that are places of worship. This is in addition to the £12 million already available in the Listed Places of Worship Grant Scheme (LPWGS).
The announcement was made following a campaign by charities to persuade the government to rethink its decision, announced in the Budget in March, to start charging VAT at the standard rate on all alterations to listed buildings. Currently these works are zero rated.
Charity Finance Group (CFG) and NCVO, however, argued that the concession did not go far enough. Removing the zero rating will bring huge costs to charities like museums, arts groups and hospices that operate in listed buildings, they argued.
Caron Bradshaw, CEO of the CFG, said: "The removal of the zero rating is yet another example of poorly thought out and clumsy policy-making by government. It’s vital that they go further and simply exempt all charities from the measure.
“What is particularly worrying is that this is a permanent move – once a zero rating is gone it will be near impossible to reinstate. For years charities have highlighted the problem of irrecoverable VAT and so it’s impossible to see this as anything other than a retrograde step, flying in the face of all charities have campaigned for and further contributing to an un-level playing field when it comes to VAT.”