Having already managed to close down at least 50 private schools via VAT, concerns are mounting that a similar financial assault will take its toll on the nation’s churches.
Two decades ago Gordon Brown as chancellor introduced the Listed Places of Worship Grant Scheme, which allowed churches and other religious buildings to reclaim VAT on repair bills. Concerns are mounting that Brown’s successor, Rachel Reeves will put an end to the scheme in her upcoming Budget.
The scheme has already been scaled down, throwing many church repair plans into uncertainty. In January it was announced that the scheme would be renewed for another year, but this came with a budget reduction from £42m to £23m and a £25,000 cap on the value of repairs eligible for the VAT reclaim.
Stephen Cottrell, the Archbishop of York, told The Telegraph that the scheme was a “relatively small investment” that gave significant social returns, beyond simply the restoration of old buildings.
As many as 260 Anglican churches and cathedrals could be at risk due to the uncertainty surrounding the scheme.
Cottrell said, “The vast majority of fundraising for our churches is done locally by heroic volunteers and we are deeply grateful for all they do. For more than 20 years, they have relied on the Listed Places of Worship Grant Scheme to give that crucial bit of extra help.
“This is a relatively small investment by the Government in buildings that are estimated to have a huge social value.
“We urge the Government to make the scheme permanent and lift the cap on claims.”
The Rev Marcus Walker, who is involved with the Save the Parish campaign, said that Reeves could find herself responsible for the collapse of “hundreds of listed buildings”.
He said, “Every time a church goes through the massive effort of fundraising to repair the fabric of a listed building they are saving a piece of Britain’s heritage without the Government having to lift a finger.
"The least the Government can do is not charge us VAT on top.”
Earlier this year, cathedrals raised concerns about the VAT cap.
Nerys Watts, chief operating officer of Wells Cathedral, warned that the restriction would have a "really big difference," adding an estimated £8 million to planned repair costs over the next decade.
