Value Added Tax: Listed Places of Worship

Lord Newby Excerpts

Tuesday 24th April 2012 Lords Chamber

[Lord Sassoon]

I am grateful to my noble friend for pointing out that there was an important meeting on this topic yesterday, led by the right reverend Prelate the Bishop of London and my right honourable friend the Chancellor of the Exchequer. My understanding is that they had a very open and constructive discussion. The Chancellor made it clear that the £5 million which the Government have committed to the listed places of worship grant scheme in the Budget is on top of the £12 million which the scheme already had. We accept, having seen the churches’ numbers, that the VAT change will indeed be more than £5 million and that we need to commit more money, and discussions will continue next week to look at what the projected numbers and our commitment should be.

[Lord Newby]

My Lords, does the Minister acknowledge that the VAT changes are particularly damaging to projects that are already under way? For example, for a project in Kingston, the church reckons that it may have to pay as much as £400,000 additional VAT as a result of this change, when it has already raised several million pounds. Can the Government, at the very least, give a commitment that schemes that are already under way and on which there has already been significant fundraising will not be disadvantaged by the more general proposals in the Budget?

[Lord Sassoon]

My Lords, I confirm that there are indeed transitional arrangements in place for approved alterations to listed buildings, which cover contracts in place before Budget day. Contracts in place on that day will retain the zero rate if the work is performed by 20 March 2013. Our consultation paper specifically asks for comments on whether the transitional period is sufficient. We will of course listen to any reasonable comments about these transitional arrangements and will consider whether any more generous arrangements could be implemented.