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CoE facing £20 million VAT bill: The Church of England Newspaper, April 29, 2012, p 6. May 6, 2012

Posted by geoconger in Church of England, Church of England Newspaper, Development/Economics/Govt Finances.
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Tony Baldry MP

The Government’s plan to end the VAT exemption for listed building alterations will cost the Church of England an additional £20 million per year, the Second Church Estates Commissioner told Parliament last week.

On 18 April 2012 Mr. Tony Baldry responded to a written question from the member for The Wrekin, Mr. Mark Pritchard (Cons.) asking whether the Church Commissioners would speak to the Chancellor about the financial effects “of VAT changes to repairs for listed church buildings in the diocese of Hereford and Lichfield.”

Mr. Baldry stated that he wrote to the Chancellor of the Exchequer on 22 March and intended to “follow this up with discussions soon.”

Ending the VAT exemption was likely to cost the Church of England £20 million per year as it had “responsibility for the care and upkeep of 12,500 listed churches and cathedrals across England.”

There repairs were “largely met by the voluntary giving and activity of its congregations,” he said, noting the “large majority of alterations” took place “order to improve access to them and to broaden their use by the wider community.”

The cost to Hereford under the proposed VAT changes would cost the cathedral “an extra estimated £160,000 to complete its existing plans to improve its sound, lighting and heating systems.”

Mr. Baldry said that of the Hereford’s 423 buildings, 360 were listed churches. He cited the case of St John the Evangelist in Shobdon, which was “currently completing a £900,000 restoration project of which only 10% has been completed. The application of VAT to the total cost is likely to prove a significant setback.”

In the Diocese of Lichfield the proposed changes would add a further £240,000 to its costs of adding “toilets and facilities for the disabled” and renovations to the Close.  Of Lichfield’s 450 buildings, 315 were churches who would be affected by the changes.  “No specific figures are available for projects in 2012, but across the diocese a conservative estimate of over £300,000 was spent on alterations to parish churches in 2011,” he said.

The Second Church Estates Commission noted that “though proposals in the Budget impact mostly on alterations to listed church buildings—as distinct from repairs—in that they remove the zero VAT rating for all listed building alteration works, the Church of England is concerned that the money available to reimburse churches for VAT charged for repair work will also be affected as a consequence of the extra demands placed on the Listed Places of Worship Grant scheme, which is to have eligibility widened to include alterations.”

First printed in The Church of England Newspaper.


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