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page 2 No 35 Spring 2012 FREE Diocese of Lincoln newspaper www.lincoln.anglican.org
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Churches in crisis after VAT rule change Will Harrison
arishes which have begun work on making their churches suitable for community use face a 20% hike on their bills after a decision by the Treasury to impose VAT on alterations to listed buildings. The Chancellor, George Osborne, announced a VAT increase from zero to 20% on alterations to listed buildings, which will cost the Anglican church and its congregations up to £20 million pounds next year, and it is claimed that the decision will jeopardise the future of historic churches and listed buildings. The Treasury has stated that, to help churches tackle the much-increased costs, the scope of the Listed Places of Worship Grant Scheme will be extended; an extra £5 million has been specified for the scheme though it is expected that consequently the current available funds will be divided into smaller amounts among a larger group of claimants. Even under the previous scope the grant scheme was only able to pay out 43% of the amount claimed. Transitional arrangements are in place to mitigate the impact of the proposed introduction of VAT at 20% for works presently zero-rated. Works with a signed contract in place by 21 March 2012 will be exempted from the 20% rate of tax for works done by 20 March 2013. Works after this date will pay VAT at the standard rate. Works contracted after 21 March 2012 will incur VAT at the standard rate for the parts of the contract performed after 1 October 2012. Lincoln’s Diocesan Advisory Committee (DAC) Secretary, Keith Halliday, said that despite the transitional arrangements, the hard work of parishes to restore their churches to the centre of the community has suffered a severe blow. “The churches that have gone through a programme of fabric repairs, funded by English Heritage, the Heritage Lottery Fund, other grant funders and local fundraising, are now trying to bring these buildings up to a standard where the community can use them,” said Keith. > Continued on page two
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Future work such as this, completed at Aslackby Parish Church, has been thrown into doubt by changes to VAT rules.