VAT on work on listed buildings.

Today Headline in the Dail Telegraph

We have received this from the umbrella charity Heritage Alliance:

Buried within the Budget was a shock decision by the Chancellor to introduce standard rate VAT to the cost of approved alterations to listed buildings. This means from 1 October 2012 approved alterations to listed buildings will be subject to VAT at 20 per cent, where before they were zero-rated. The morning after the Budget our Chairman Loyd Grossman aired his thoughts on this in the Daily Telegraph: click here to read what he said.

The Heritage Alliance is concerned this drastic change could have a devastating impact on the future of listed buildings across the country, as it presses yet more costs on communities working to give them a new lease of life – such as through adding toilet facilities or disabled access. HMRC justifies this change because in its view “the majority of the work covered by the relief consists of extension work which is not necessary for heritage purposes” – yet we say the majority of the work is essential for heritage purposes, as without such alterations heritage buildings cannot have a future.

HMRC’s overarching reasoning for this change rests on its view that zero rating alterations “give[s] a perverse incentive for change as opposed to repair.” Of course, in our view the answer to that was to zero-rate repair – an issue that’s united the heritage lobby for years. The Alliance has long argued for the reduction of VAT on repairs and maintenance as the sustainable option.

What do you think?  Please respond to HMRC’s consultation – open here until 4 May. And please copy your responses to us mail@theheritagealliance.org.uk as we’re keen to gather opinion from the sector to inform our representations to Government – more to come on this in Update 229 on 13 April.

Add your thoughts here.