The deans of 23 cathedrals including Canterbury, Durham and York signed an open letter to Chancellor George Osborne yesterday urging him to change his policy implementing VAT for alterations to listed buildings.
They called on the Chancellor to amend the 'heritage tax' policy which was announced in Budget 2012 to one that will ‘support rather than damage our nation’s heritage’.
The Times newspaper quotes the Bishop of Hereford Anthony Priddis, who expresses his dismay at a VAT bill of £150,000, and Church estates commissioner Tony Baldry, who has previously written to the Chancellor “urging a rethink”.
It also gives the examples of Canon Tony Dickinson, of St Francis of Assisi church in High Wycombe, Buckinghamshire, whose church is in the middle of a £250,000 renovation project, and Jonathan Greener, Dean of Wakefield Cathedral, whose £3m restoration would incur a £200,000 tax bill under the Chancellor’s plans.
Currently, grade one and grade two listed buildings only incur VAT on routine repair work to structural damage, and not on any works categorised as ‘improvement’, such as alteration and restoration works. Under the Chancellor’s new stipulation, this exemption would be removed from October.
The Treasury has made an extra £5m available to the Church by way of compensation, and has insisted that the move is designed to end the anomaly of millionaires being able to make costly improvements to their properties without paying VAT if they happen to own a listed building.
Last month the Church of England reacted swiftly to the 2012 Budget by sending a letter to Osborne requesting an exemption for places of worship in his VAT for listed building alteration measure, claiming that the new guidelines will cost the Church up to £20m annually. In the letter, the Church said that the tax would "be a blow to the huge numbers of volunteers who are working to open up their churches to wider community use". The organisation further warned that the move "seriously damages the sustainability of many of our great buildings".
A petition launched by the Church of England reached more than 10,000 signatures last week.
According to the Times' estimates, the so-called ‘heritage tax’ on listed buildings could make the government almost £500m – and a quarter of that would come from the Church of England.
