Churches given £30m to ease burden of VAT (From The Oxford Times)

Churches given £30m to ease burden of VAT

10:30am Saturday 19th May 2012 in Oxford By Andrew Smith, Business Editor. Call me on 01865 425460

CHURCH leaders in Oxfordshire have welcomed news that the Government is to put £30m into a special fund to offset the impact of changes to VAT laws.

Chancellor George Osborne caused a storm of protest – led by people in Oxfordshire – when he revealed in the Budget in March that work to alter listed buildings, including churches, would be subject to VAT from October.

Previously, alterations had been VAT exempt, although maintenance work was subject to the tax, with the grey area being the replacement of church roofs targeted by lead thieves.

Churches angry about the change in the tax rules raised a petition on the issue which was sent to Prime Minister and Witney MP David Cameron.

Mr Osborne has now agreed to provide an extra £30m for the Listed Places of Worship grant scheme, which will mean churches will be able to reclaim any additional VAT costs generated by alterations.

Jeff West, a member of the Church of England’s Oxford diocesan advisory committee for the care of churches, said: “We are delighted. This will go a very long way to answering the concerns of churches with listed buildings to look after.

“Lots of churches are trying to adapt their facilities by installing loos and kitchens and this would have added 20 per cent to the cost of doing that.

“Most of the country’s Grade I listed buildings are looked after by church congregations and the original announcement was an awful shock.”

The Listed Places of Worship scheme, which already benefits from a £12m a year Government grant to offset the impact of VAT on maintenance work, will now be boosted to £42m, guaranteed until the next General Election in three years’ time.

Banbury MP and Church Commissioner Tony Baldry, who held talks with Mr Osborne about the issue, has also ensured the application process will be speeded up, with requests for the grants going straight to the Treasury, rather than via other Government departments.

Mr Baldry said: “I think this is a generous amount from the Chancellor, given the present financial circumstances.”

But the Rev David Randell, vicar of St Mary’s Church, in Warkworth, near Banbury, who struggled to raise money for a new roof after thieves stole lead worth £100,000 in August last year, was more sceptical.

He said: “Applying for this grant can be a bit of a lottery. We will apply for every bit of money we can get but we won’t hold our breath. Actually reducing VAT for churches would be a fairer system.”