Question to the HM Treasury:

To ask His Majesty's Government what conversations they have had with heritage and faith communities about zero-rating VAT on repairs to listed buildings; and what assessment they have made of potential implications for the Listed Places of Worship Grant Scheme.

VAT is a broad-based tax on consumption and the 20 per cent standard rate applies to most goods and services. VAT is the UK’s second largest tax forecast to raise £171 billion in 2024/25. Taxation is a vital source of revenue that helps to fund vital public services.

Evidence suggests that businesses only partially pass on any savings from lower VAT rates. In some cases, reliefs do not represent good value for money, as there is no guarantee that savings will be passed on to consumers.

To preserve heritage, restorative work carried out on listed buildings previously benefited from a zero rate of VAT. However, this relief was abolished in 2012, as it was primarily used to carry out extension work unnecessary for heritage purposes. Withdrawing this relief simplified VAT rules and also removed the scope for error when categorising construction work as either alteration or repair.

Over £350 million has been returned to churches, synagogues, mosques and temples through the Listed Places of Worship Grant Scheme. This has helped protect listed places of worship and enabled them to continue their work as centres of worship and community assets.

Departmental settlements have been set following the Budget announcement on October 30. The outcome of individual programmes, such as the Listed Places of Worship Grant Scheme, will now be assessed by the Department for Digital, Culture, Media & Sport as they finalise their financial allocation for 2025/26.

The Chancellor makes decisions on tax policy at fiscal events in the context of the overall public finances.