GGF in Meeting with Treasury Minister
29th May 2012

The GGF attended a joint meeting with David Gauke MP, Exchequer Secretary to the Treasury, on Thursday 17th May to discuss VAT on approved alterations to listed buildings.

A total of 14 organisations attended the meeting at the Treasury which came about as a result of the joint letter to Chancellor George Osborne on the 1st May 2012 asking for VAT on approved improvements on listed buildings to remain at zero rating.

On the morning of the 17th May, the Government had announced that it was expanding the scope of the Listed Places of Worship Grant Scheme, and had unveiled an amount of £30m for this scheme. The Government has said that this will be 100 per cent compensation for the additional cost borne by churches for alterations, and should also go a long way to helping their situation with repairs and maintenance.

At the meeting with Mr Gauke stated he understands the concerns being raised and
that the points raised on the briefing paper and explained by the different organisations were valid.

The points listed on the briefing paper were:-
1) Introduction; we would like to see the Government drop its plans to remove the zero rate of VAT on approved alterations to listed buildings
2) The consultation process is flawed, because it does not offer the opportunity to comment on the substance of the proposals.
3) The measure will have a negative impact on our heritage
4) The VAT relief does not currently provide a tax advantage for the rich; according to English Heritage research, 50% of people living in listed buildings are in socio-economic groups C1, C2, D & E.
5) The changes will have negative consequences for the construction industry
6) The transitional arrangements do not protect projects already underway

Mr Gauke referred to the “perverse incentives” in the VAT system, such as some repairs to listed buildings modified to be or "dressed up" as alterations to be exempt from VAT. He added, “there is uncertainty as to what is a repair and what is an alteration; however where there are adaptations for disabled access there is zero rate of VAT available for such work.”

He added, “To raise revenue, particularly to fund the rise in personal tax thresholds, we looked at VAT anomalies, and alterations to listed buildings is one of them.”

Mr Gauke concluded that he would look at the case presented by the coalition of organisations adding “We would like objective evidence from any of the organisations via the Federation of Master Builders to support the case for keeping listed building alterations at zero rated VAT.

Nigel Rees, GGF Executive concluded, “It was good that the GGF and our campaign partners have given the Treasury food for thought. We will continue to support the campaign for alterations in listed buildings to be zero VAT rated”

jlee@ggf.org.co.uk