As part of the Budget announcements, HMRC has opened a
consultation on its proposal to remove current VAT relief for
approved alterations to listed buildings, from October 2012, with
the consultation to close on 4 May.
Entitled 'VAT: addressing borderline anomalies', HMRC says the
consultation is intended to 'address some of the loopholes and
anomalies in our VAT system….For example, at present, soft drinks
and sports drinks are charged VAT; sports nutrition drinks are
HMRC considers that 'the majority of the work covered by the
relief consists of extension work which is not necessary for
heritage purposes', and that this generates 'a perverse incentive
for change as opposed to repair'.
The Trust believes that these proposals represent a missed
opportunity to rationalise VAT in ways that would benefit jobs, the
environment and the economy by encouraging building care,
maintenance and improvement.
The withdrawal of this VAT relief will act as a sharp
disincentive to just the sort of sensitive alteration of historic
buildings that is often necessary to secure a viable long-term use
for these buildings for the future.
As direct public funding for heritage declines, it is all the
more important for Government to promote - not remove - any
leverage that encourages the charitable and private sector to take
on responsibility for our heritage. This measure will have severe
consequences for our listed buildings where the financial viability
is often marginal
Heritage Alliance is leading the campaign against these changes
and has issued a 3-step toolkit to help persuade the Government to
abandon the plans. Find out more and join the campaign here.
The Trust has previously signed up the Cut The
VAT campaign to cut VAT on home improvements to 5% in order
- Boost the UK economy
- Stimulate the construction industry
- Create thousands of jobs
- Bring thousands of empty properties back into use
- Improve the energy efficiency of our housing stock and reduce
the incidence of fuel poverty
- Help those who cannot afford vital repairs to their homes
The SNP Government have also supported the campaign to
rationalise VAT to create a level playing field for building
repairs and new build.
Alex Neil MSP, Cabinet Secretary for Infrastructure and
Capital Investment said:
"It is a real distortion and very unfair that full VAT is
charged on renovations and repairs. The SNP Government has been
arguing for years with the Treasury that this vat should be reduced
immediately to the lowest permissible level within the EU, i.e. 5%
instead of 20% as at present. Such a move would act as a major
stimulus to the building industry at a crucial time when it needs
There is much evidence that re-using existing buildings is much
more positive for the environment than new construction, but
instead of encouraging this kind of work these most recent moves by
the HMRC to increase VAT on alterations to listed buildings are a
step in the opposite direction.