Labour hits nation’s churches with ‘shameless stealth tax’

Labour is accused of hitting historic churches with a “shameless stealth tax” which could see them forced to pay tens of thousands of pounds in VAT on repairs. The end of a Government grant scheme which allowed churches to recover VAT on maintenance work has triggered a warning that some places of worship may be forced to close. Champions of churches warn it is impossible to run a parent and toddler group when there is a “leaking roof or a crumbling tower”.

The Listed Places of Worship Grant Scheme has been replaced a new “renewal fund” backed by more than £18million. But the Liberal Democrats warn the 51 places of worship receiving help could face an average VAT bill of nearly £59,000.

Anna Sabine, the party’s culture spokesperson, said: “The Government has chosen our churches to foot the bill for its Budget black hole. This ‘Places of Worship Renewal Fund’ is nothing more than a shameless stealth tax that saddles communities with thousands in added VAT. “Our churches and listed buildings are far more than places of worship. They are the beating heart of our towns and villages, home to food banks, toddler groups and lunch clubs. Under Labour’s cruel tax, roof repairs will be delayed, doors will close, and the groups that rely on these buildings will have nowhere left to go. [We will] will fight this tax every step of the way and reintroduce VAT relief for listed places of worship.”

The Church of England’s Bishop of St Albans, Andrew Rumsey, has pledged to “press for churches to have better access to funding beyond the Renewal Fund, including for vital VAT relief on repairs, the loss of which is keenly felt by many”.

Sir Philip Rutnam, who chairs the National Churches Trust, welcomed the Government’s new fund but said: “There are thousands of rural churches with small congregations struggling to look after extraordinary buildings. And everywhere churches now face paying 20% extra for repairs with the change to VAT. We need a comprehensive approach which includes a better grant scheme and VAT relief for churches, just like museums. You cannot run a parent and toddler group or a food bank in a church with a leaking roof or a crumbling tower.”

A spokesperson for the Roman Catholic bishops struck a positive note, saying: “Whilst the closure of the grants scheme that enabled listed churches to reclaim VAT on repairs is regrettable, the re-introduction of a straightforward grants scheme focussed on repairs at listed places of worship is warmly welcomed and a major step forward. The nine Catholic churches which are going to benefit from the new grant scheme are all in areas of significant deprivation where accessing funding for repairs is particularly challenging, if not impossible, without the support now being provided.”

The Department for Digital, Culture, Media and Sport’s spokesperson said: “This week we’ve announced that 51 places of worship are receiving a share of over £18million from the new Places of Worship Renewal Fund. These are all projects in areas of the greatest need, where fundraising to get repair works started can be almost impossible. Our upfront capital grant means that vital repairs and urgent improvements can begin at the earliest opportunity: getting church roofs fixed, crumbling stonework restored, and keeping the doors open to communities.”