VAT on Church buildings

"We speak to many Church leaders and treasurers about VAT," says Les Howard of vatadvice.org, "and we frequently make them smile when we explain that VAT can, in some cases, be mitigated on construction and alteration works to Church buildings. So, whether you are spending £5,000 or £5m, it is worth addressing the question of VAT.

"Although the basic rule of VAT is that most goods or services are charged at 20%, there are a number of provisions that reduce the VAT applicable for certain works to Church buildings," Les continued.

1. Accessibility works. If you are constructing a wheelchair ramp or widening doorways or corridors, ask the building contractor to zero rate his invoices.
2. ‘disabled’ toilet facilities. Works to improve existing or create new toilet facilities are also zero rated.
3. Where you create a charitable ‘annexe,’ its construction can be zero rated. This often proves to be a challenging issue, as the conditions for zero rating are complex. We often advise an at early stage to improve the opportunity for zero rating.
4. The Listed Places of Worship Scheme (LPWS) currently runs to 31 March 2020. This grant scheme allows a Church to recover VAT incurred on works to its building. This includes professional fees as well as work to the fabric of the building. As you would expect, there are various restrictions.
5. We also remind Churches that gas and electricity supplied to Churches should be at 5%, not 20%. Where a utility company has incorrectly charged VAT at 20%, it should refund the difference.

The team at vatadvice.org can help you navigate the VAT maze! They have experience with Churches of all sizes and flavours. Do follow this link and find out more: http://vatadvice.org/church-building-projects