The National Churches Trust (NCT) has urged the government to reconsider its decision to end an exemption from VAT for historic churches paying for repair work.
The Listed Places of Worship Grant Scheme (LPWGS) was first instituted by Gordon Brown during his time as chancellor and exempted historic churches from having to pay VAT on repair work.
The Starmer government first announced it would be nearly halving the scheme’s budget before replacing it entirely with a new Places of Worship Renewal Fund, which opened for submissions this week.
In a “fact check” of the government’s new scheme, the NCT said it was pleased that government support for historic churches had not ended entirely, but added that the decision to remove the VAT exemption needed rethinking.
“It is unfair that museums and galleries with free admission pay no VAT on their buildings, but churches must now pay the full 20%, even though they provide essential services to their local communities and collectively house collections far larger than any museum," it said.
“It is not right that it costs 0% to demolish a listed church, but to charge local communities 20% to maintain and care for their building.”
As well as concerns about VAT, the NCT also raised a number of other questions about the new scheme, notably the fact that the old LPWGS applied to the whole country, while the new fund is only accessible to churches in England as heritage is a “devolved issue”.
There are also fears that churches with larger congregations asking for funds for quick fixes may receive priority over smaller, more remote churches or those that need to undergo longer team repairs.
Labour’s decision not to exempt historic churches from VAT echoes a similar decision on private school fees. Some estimates suggest as many as 100 independent schools have been forced to close as parents are unable to afford a 20 per cent increase on school fees.
Put forward for equality reasons, the policy has in fact meant that private education remains the preserve of the rich and privileged, while those in the middle and working classes are priced out.
