UK

Tax break for church repairs cut

The belfry of a rural church
Image caption Bad news at the belfry as VAT will no longer be recoverable on the cost or repairs to church bells

The Government is to scrap tax relief to churches for repairs to clocks, pews, bells and organs.

VAT on repairs to some fixtures and fittings will no longer able to be claimed back due to government efficiency savings.

The main beneficiary of the scheme - the Church of England - said it had reluctantly gone along with the proposals.

But it was concerned about further possible cuts next year.

The Listed Places of Worship grant scheme allows places of worship to claim a grant equal to the VAT paid on eligible works. It was started in 2001 and is due to end completely on 31 March 2011.

The tightening of the rules for clocks, pews, bells and organs will come into force in January as an interim measure while other works remain unaffected for the remaining three months of the scheme.

Spending review

The future of the scheme beyond this financial year will become clear in the Comprehensive Spending Review on 20 October.

Culture Minister John Penrose said: "We asked representatives of the major denominations how they would prefer the savings to be made, and it was agreed that reducing the scope was the least damaging option for making savings, whilst still allowing claims for all other sorts of work."

The Listed Places of Worship scheme has paid out just over £110m since it started in 2001.

Approximately 93% of current VAT refunds have gone to Church of England churches and cathedrals.

Anne Sloman, who chairs the Church Buildings Council, said: "Given a choice between a reduction in the grant across the board for all repair work on churches, or maintaining the full grant for most works, we reluctantly went for the exclusion of some items during this period."

Extra cost

She was concerned that if the scheme were not extended beyond next March, VAT would become an extra cost for many other works to churches too.

"The extra money that congregations will have to find to spend on the roof, and other repairs needed to get buildings into a good state will no longer be available for those works needed to reorder the church for community use.

"In many rural areas, churches are the only public buildings left, providing space for post offices, community shops, meeting rooms, playgroups and so on.

"The government has indicated that it wishes to encourage the Church of England to continue making its 16,200 buildings available to serve the wider community beyond the worshipping congregation.

"Therefore the Church continues to press the case for the retention of the scheme in full beyond March 2011," she said.

Crispin Truman, chief executive of the Churches Conservation Trust, said: "The Listed Places of Worship scheme has helped around 9,000 communities to repair their historic places of worship.

"Any loss of scope under the scheme is to be regretted, but we appreciate that the department needs to contribute to the savings needed and are pleased that denominations had a chance to comment on the proposals."

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