Scrapping VAT relief for listed buildings will impact the sector

Scrapping VAT relief for listed buildings will impact the sector
Technical briefing

Scrapping VAT relief for listed buildings will impact the sector

Finance | Graham Elliott | 30 May 2012

Graham Elliott explains the impact the loss of VAT relief will have on the sector. 

The proposed loss of VAT relief for listed buildings will, unless there is a change of heart in government, impact on the charity sector in a variety of ways.

It will add VAT to alterations which charities feel the need to make to buildings used for relevant charitable purposes, relevant residential purposes, and as dwellings. This sweeps up churches, student accommodation, village halls, and care homes, among many others.

Particular attention has been drawn to the fate of listed churches. Although the terms of coverage of the Listed Places of Worship Grant Scheme will be widened to cover alterations, we understand that only c.£5m will be put towards this.

A likely unwanted consequence of the change will be that certain building projects, that would have been configured as sensitive extensions, will have to be configured as clumsy separate buildings which sit cheek-by-jowl with the listed building, or as relevant charitable-purpose annexes. This will gain nothing for the Treasury, but will increase the costs of these projects.

There has been too little emphasis of the point that, once the zero rate is removed, it cannot, under European law, be reinstated. Unlike the tax cap on charity donations, which could later be reversed, the zero rate is lost forever.

The transitional rules appear, in my view, to be inadequate for the typical scale of a charity’s listed-building alterations.

Unless the contracts for the works were signed before the Budget announcement, the relief lasts only until the end of September, and anti-forestalling rules mean that only work actually performed before October is relieved, so paying early will not assist. For those which have signed contracts on time, the relief lasts only until 20 March 2013. This date has been chosen specifically to allow the committed projects to be completed. This may be reasonable for a basic domestic alteration, but not for a large remodelling of a significant charity listed building.

The above details could change, although it is hard to see how they could get much worse.

Graham Elliott is a partner at haysmacintyre 



[Cancel] | Reply to:

Close ยป

Community Standards

The community and comments board is intended as a platform for informed and civilised debate.

We hope to encourage a broad range of views, however, there are standards that we expect commentators to uphold. We reserve the right to delete or amend any comments that do not adhere to these standards.

We welcome:

  • Robust but respectful debate
  • Strongly held opinions
  • Intelligent relevant discussion
  • The sharing of relevant experiences
  • New participants

We will not publish:

  • Rude, threatening, offensive, obscene or abusive language, or links to such material
  • Links to commercial organisations or spam postings. The comments board is not an advertising platform
  • The posting of contact details for yourself or others
  • Comments intended for malicious purpose or mindless abuse
  • Comments purporting to be from another person or organisation under false pretences
  • Gratuitous criticism, commentary or self-promotion
  • Any material which breaches copyright or privacy laws, or could be considered libellous
  • The use of the comments board for the pursuit or extension of personal disputes

Be aware:

  • Views expressed on the comments board are left at users’ discretion and are in no way views held or supported by Civil Society Media
  • Comments left by others may not be accurate, do not rely on them as fact
  • You may be misunderstood - sarcasm and humour can easily be taken out of context, try to be clear


  • Enjoy the opportunity to express your opinion and respect the right of others to express theirs
  • Confine your remarks to issues rather than personalities

Together we can keep our community a polite, respectful and intelligent platform for discussion.