IHBC voices scepticism at Government response to petition on VAT relief for ‘repairs and approved alterations to listed buildings’

graphicThe Listed Property Owners Club (LPOC)-led petition to the Chancellor for reduced VAT ‘on repairs and approved alterations to listed buildings’ (LBs) – supported by the IHBC – has passed 10,000 signatures, the government has responded online, but the IHBC is sceptical.

IHBC Director Seán O’Reilly said: ‘There is a clear sense that this ‘smoke and mirrors’ response – including a confusion  of impacts of financial support with de-regulation and all its attendant problems – is only about deflecting the responsibility back on the heritage sector or Europe.’

‘In fact current tax arrangements aggravate environmental degradation using a self-evidently perverse policy that offers tax relief to the most damaging of new build while penalising the care of the most valued built resources.’

IHBC Chair James Caird said: ‘As we have pointed out quite clearly the issue is one of detrimental market imbalance: Good maintenance is the key to low ownership costs and it is perverse that repairs should be subject to VAT when new development is not.’

‘This has been ignored by government here again.’

‘However we will keep pressing that point any way we can.’

‘A good way for you to help achieve this is to get your friends to sign up to this petition, as at 100,000 we can secure a debate in Parliament and help bring clarity to thinking in government!’

The petitioners write:

Reduce VAT to 5% on repairs and approved alterations to listed buildings.

  • Private listed property owners are preserving much of Britain’s built heritage for future generations, yet many are struggling to maintain and repair their homes. In 2012, the Government removed the zero rate of VAT for pre-authorised alterations to listed buildings. This was a major blow to owners.

Government writes in response to the petition:

Protecting and making the most of the UK’s heritage is important for our economy and society. We released a Heritage Statement in 2017, setting out how we will support the heritage sector.

Historic England and the Heritage Lottery Fund provide advice and support for the conservation of heritage, including listed buildings. The government recognises the particular challenges faced by private owners of listed properties in planning regulations, and this is why we have introduced measures to streamline the listed buildings consent regime. These measures include giving local authorities the power to grant a general consent for minor works to listed buildings, this removes the need for specific applications for these types of works.

VAT is a broad-based tax on consumption and the standard rate of twenty per cent applies to most goods and services. While there are exceptions to the standard rate, these are strictly limited by domestic and EU law as well as by fiscal considerations. VAT is an important source of revenue which is used to fund the government’s public spending priorities including hospitals, schools and defence. ]

Under EU law, a reduced rate of five percent could be applied to alterations or repairs of buildings, but it would not be possible to limit this to alterations and repairs of only listed buildings. Introducing a reduced rate is estimated to cost the Exchequer at least £2.5 billion a year and this would have to be balanced by increased taxes elsewhere, reductions in government spending, or borrowing. While all taxes are kept under review, the government has no plans to change the VAT treatment of renovations and repairs at this time.

HM Treasury

See the petition and response 

For more background see the IHBC NewsBlogs (26/10/2018)  and (12/10/2018)

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