The Heritage Alliance says the government’s proposal to levy the full rate of VAT on alterations to listed buildings is a “new tax on community initiative”.
Responding to HM Revenue & Customs’ consultation on the plans, the Alliance which represents 92 heritage organisations said small building projects would struggle to raise the extra 20 per cent needed to pay the tax.
The National Trust believes the zero VAT rating should be retained for alterations to listed buildings owned by charities to help ensure their survival.
Facing widespread public criticism, the Chancellor of the Exchequer, George Osborne, said that an extra £30m a year would be given to the listed places of worship grant scheme which makes grants to churches to cover VAT payable on repairs.
Osborne went on to say the money would be used to repay VAT charged on repairs and maintenance.
The Chancellor’s response which favours religious organisations has infuriated the heritage community.
Only places of worship will benefit from Osborne’s “generosity”. Other listed buildings continue to face an uncertain future.