Another brilliant move in the budget may jeopardise Government plans to encourage more community use of public assets . This budget has turned out to be a real disaster area for the third sector!
Plans to charge VAT on alterations to listed buildings could be a "fiscal torpedo" for the government's Right to Bid scheme, set up to enable community groups to buy disused publicly owned assets.
I have written to my good friend Eric Pickles, the communities secretary to warn that the proposal to remove the zero rating will harm voluntary organisations that already own or look after listed buildings.
It would also put charities off acquiring such buildings through the government's Right to Bid scheme, designed to make it easier for community groups to buy local assets.
In the context of the deeply damaging cap on philanthropy and the cap on community investment tax relief, this VAT change sends a further terrible message about the government's commitment to localism and its ability to prosecute those agendas effectively. It also risks doing serious damage to the work of voluntary organisations up and down the country.
For example some of the buildings that SIB have made loans for are listed, so for example the great plans to turn Hitchin Town Hall into a vibrant community facility, or the rescue of a beautiful Tudor barn in Leominster.
My friend Steve Wyler, of Locality, estimates that some 30 % of the proposals they are seeing for community acquisition under the right to buy or challenge are listed.
So whilst you might imagine this is something that only affects cathedrals or castles, it will hurt our third sector.
A consultation paper from HM Revenue & Customs, which proposes that the zero rating for alterations to listed buildings is abolished from 1 October, closes on 4 May. So get writing to place your comments!
And how interesting that on this plan they want a very limited consultation, whereas they think a leisurely
one year is fine on the charity tax cap!
1 comment:
I'd been following the VAT debacle but the consultation is so far under the radar it had passed me by - so thanks for useful blog! I've sent them some thoughts...
It would appear that HM Revenue and Customs has misunderstood the nature of the existing anomaly in the VAT rating of works to Listed Buildings. The issue is not, as would be suggested by the remedy, that Listed Building Alterations are zero-rated where other building categories are not, creating a situation where "owners of Listed Buildings receive a tax advantage over owners of other types of building" - so they should! The issue is that alterations to Listed buildings are zero-rated where repairs and maintenance to Listed Buildings are not. As an architect working with Listed Buildings it has long been apparent that this policy encourages owners (whether of churches, monuments or residential) to focus on creating alterations sometimes at the expense of repairs.
The current proposal does not address this at all, but by removing all zero-rating from Listed Buildings it will without any doubt whatever jeopardise the survival of all classes of Listed Building. The small home-owners with whom I most often deal will shy away from purchasing or working on Listed properties because they are already disadvantaged over owners of other building types by the onus from the Planning Department (rightly) to repair in like materials and construction, which will put an unacceptable burden on the cost of repairs if there is to be no VAT compensation. It will become far more cost-effective to allow such properties to decline beyond repair (and I know of many unexplained fires..) so that a zero-rated new-build can be put on the land. THis in turn has a knock-on effect on the architectural practices working with Listed Buildings, at a time when the construction industry is not favouring such small businesses...
If the intention of the current proposal by HM Revenue and Customs is anything other than raising funds at the expense of Britain's Listed heritage then this paper needs to be rethought.
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