Value added tax
Value Added Tax (VAT) can be an important consideration for your project. The repair and maintenance of places of worship represents one of the largest areas of expenditure for churches. A lower or higher VAT rate could make a huge difference.
First of all, you need to be aware which VAT rate applies to your specific proposal, as the rates vary for repair and new build. The standard rate of 17.5% applies, unless the building work can be zero-rated. VAT can be charged at zero percent by contractors carrying out:
- the adaptation or installation of certain aids for disabled people, such as ramps or bathrooms;
- alterations to listed buildings used for a relevant charitable purpose (including places of worship). Eligible alterations must affect the basic structure of the building, such as walls, floors, roofs, doors and windows. This includes, for example, the building work and materials required for the construction of an extension, the purchase and installation of new stained glass windows, church organ, new light fittings and the extension of wiring and plumbing systems, as these form part of the building. Eligible alterations also need to be 'approved', i.e. have all the required permissions, including faculty.
You can find further information in the series of notices on the HM Revenue and Customs website, particularly Notice 708 Buildings and Construction (June 2007) and Notice 701/7 VAT Relief for Disabled People (August 2002).
Listed Places of Worship grant scheme
Since April 2004, the Listed Places of Worship Grant Scheme has enabled listed places of worship throughout the UK to claim back the full amount of VAT paid on eligible works of repair carried out on and after 1 April 2004. (Claims for eligible repair works carried out between 1 April 2001 and 31 March 2004 also qualify, but works over this period will only obtain the difference between 5% and the actual amount of VAT paid.)
Applications can only be made:
- for works carried out on listed places of worship;
- works carried out to repair or maintain the fabric of a listed building;
- works to certain fixtures and contents, e.g. bells, organs, clocks, wall paintings, fitted pews, incurred since 22 March 2006;
- professional fees on eligible works incurred since 22 March 2006;
- in arrears;
- for work carried out on or after 1 April 2001;
- for works costing more than £1,000
The grant scheme is overseen by the Department of Culture, Media and Sport.
For full details of this scheme, including comprehensive guidance and an application form, visit www.lpwscheme.org.uk, phone 0845 601 5945 or write to:
Listed Places of Worship Grant Scheme
PO Box 609
Newport NP10 8QD
Memorial grant scheme
The scheme started in November 2005. The Government has made proposals to the European Commission for a permanent reduced VAT rate to be charged on memorial construction, renovation and maintenance. The Memorial Grant Scheme is a temporary measure. It will operate until 2011 unless agreement is reached sooner on a permanent reduced rate.
The scheme returns in grant aid the amount of VAT incurred in the construction, renovation and maintenance of memorials on or after 16th March 2005. Invoices spanning works before and after 16th March 2005 can be submitted, but only the element incurred on or after this date will be refunded. There is no maximum or minimum limit on the amount reclaimable.
The cost of professional services (architects, structural engineers, surveyors, planning supervisors, archaeologists, H&S advisors, bat inspectors and professional fundraisers), which are directly related to eligible repairs, are eligible from 22nd March 2006.
The purpose of the scheme is to recognise the social value of memorials, and it therefore applies to memorial structures in the form of statutes, monuments and similar constructions, which:
- are solely for the purposes of commemorating people, events or animals;
- bear a commemorative inscription; and
- meet a public access test of a minimum of 30 hours a week.
Structures with a dual purpose are not eligible under the scheme (eg: a memorial bench or playground). Stained glass windows, although dual purpose, are eligible. Also excluded from the scheme are memorial gardens and trees, which are not structures capable of construction or renovation, although minor landscaping and planting undertaken in the course of memorial construction will generally be eligible. Private expressions of remembrance, such as headstones, are not covered by the scheme.
For full details of the scheme and application form go to: http://www.memorialgrant.org.uk/
Or contact:
Memorials Grant Scheme
PO Box 609,
Newport
NP10 8QD,
South Wales, UK
Tel 0845 600 6430
November 2007, January 2008
