On Thursday 14 June sixteen members of the Cut the VAT Coalition wrote to the Chancellor of the Exchequer, calling on him to drop the damaging proposal to withdraw VAT relief from approved alterations to listed buildings. The Times has published a copy of the letter here, and an accompanying news article (page 5 of The Times) here.
Chief Executive of The Heritage Alliance, Kate Pugh, commented:
“Adapting the finest of our historic buildings for modern use is essential to ensure they remain living, working resources for their communities - economically productive and a source of national pride, inspiration and delight. With its concession to the churches’ powerful lobby the Government has acknowledged the dire consequences a 20% increase in costs would have on our historic buildings; but places of worship, significant as these are, make up only 6.5 per cent of listed buildings in England. What about the other 93.5 per cent? Inequitable knee jerk reactions such as this make for bad policy making. A full, properly considered review of the evidence is essential before such a valuable EU tax relief is lost.”
The letter read:
Despite recent u-turns on a VAT hike for pasties and caravans, the Treasury is still planning a 20% tax rise that will damage the nation’s finest and most loved buildings. Worse still, this tax rise is based on completely insufficient evidence. When the Treasury announced plans to remove the current VAT relief on approved alterations to listed buildings in the Budget it stated that the majority of the work covered by the relief was not necessary for heritage purposes. A Freedom of Information request has subsequently revealed that this was based on a sample of just 105 cases despite the fact there are almost 30,000 Listed Building Consent applications during the course of a year.
Since the Budget, ministers have repeatedly told MPs and the public that this VAT increase was about stopping millionaires installing swimming pools tax free. When we looked at a sample of 12,049 recent applications for listed building consent from across the UK, we found only 34 applications for swimming pools. According to the clear guidance from HMRC less than half of these had any chance of qualifying for the VAT relief.
50% of people who live in listed buildings are in socio-economic groups C1, C2, D and E. So why does the Treasury continue to feed MPs with the swimming pool line and encourage them to send it on to angry constituents who are rightly concerned about the future of the buildings they cherish, care for and rely on?
The decision to provide additional compensation to listed places of worship demonstrates the Government’s admission that the VAT increase will put our historic buildings at risk, but offers nothing to help community centres, town halls, village halls or privately owned listed buildings.
We are already seeing evidence of projects that have been cancelled or put on hold as charities worry about how to raise an additional 20% and projects become unaffordable. This is having a negative impact on the construction industry at a time when weak demand is holding back wider economic recovery.
As Chancellor, we want you to recognise the risks are simply too high to carry on as planned and therefore we call on you to review the proposed implementation of VAT on alterations to listed buildings before it is introduced – before it is too late.
Peter Anslow, Managing Director, Listed Property Owners Club
Brian Berry, Chief Executive, Federation of Master Builders
Steve Bratt, Chief Executive, Electrical Contractors’ Association
Julia Evans, Chief Executive, National Federation of Builders
Julia Goodwin, Editor, House Beautiful
Edward Harley, President, Historic Houses Association
David Heath, Chairman, Society for the Protection of Ancient Buildings
Dr Noël James, Director, Historic Towns Forum
Andrew Leech, Executive Director, National Home Improvement Council
Dr Seán O’Reilly, Director, The Institute of Historic Building Conservation
Yvonne Orgill, Chief Executive, Bathroom Manufacturers Association
Kate Pugh, Chief Executive, The Heritage Alliance
Nigel Rees, Chief Executive, Glass and Glazing Federation
Sir Barney White-Spunner KCB CBE, Executive Chairman, Countryside Alliance