UK (Parliament Politics Magazine) – The Archbishop of York urges Chancellor Rachel Reeves to protect VAT relief for listed churches, warning hundreds of historic buildings are at risk.
As reported by The Telegraph, the Archbishop of York, Stephen Cottrell, has urged Rachel Reeves to avoid imposing what he says would amount to a VAT raid on churches in the upcoming Budget.
The Archbishop has appealed to the Chancellor to retain tax relief on repairs to historic religious buildings, arguing it provides major social benefits at minimal cost.
Over the past two decades, churches, synagogues, and mosques have benefited from the Listed Places of Worship Grant Scheme to reclaim VAT on repairs. For the Church of England, which oversees 45% of the UK’s Grade I listed buildings, the scheme remains essential.
Culture Secretary Lisa Nandy extended the scheme for a single year in January, cutting its budget from £42m to £23m and imposing a £25,000 cap on the VAT reclaim per place of worship.
What did the Archbishop of York say about church VAT relief?
The Archbishop said,
“The vast majority of fundraising for our churches is done locally by heroic volunteers and we are deeply grateful for all they do. For more than 20 years, they have relied on the Listed Places of Worship Grant Scheme to give that crucial bit of extra help.”
Stephen Cottrell said,
“This is a relatively small investment by the Government in buildings that are estimated to have a huge social value. We urge the Government to make the scheme permanent and lift the cap on claims.”
The Archbishop warns that ending the VAT relief could threaten the social support services offered by churches.
He stated,
“Our churches are at the heart of our communities – not only as places of worship, but as spaces of warm welcome, history, and hope.”
Mr Cottrell added,
“This winter many will be part of networks of winter shelters, and hundreds will be signed up to provide Warm Spaces, providing help to people struggling to afford energy bills. In some areas they are the only public buildings where people can come and gather together.”
What did church leaders say about Rachel Reeves and VAT relief?
Church leaders warn the scheme could be lost if Rachel Reeves does not secure its future in the autumn Budget.
Rev Marcus Walker, rector of St Bartholomew the Great in the City of London, said,
“Every time a church goes through the massive effort of fundraising to repair the fabric of a listed building they are saving a piece of Britain’s heritage without the Government having to lift a finger. The least the Government can do is not charge us VAT on top.”
The General Synod member, leader of the Save the Parish movement, added,
“The Chancellor has to make this scheme permanent now and lift the cap – or she will see hundreds of listed buildings collapse on her watch. If she doesn’t do it now, the scheme will collapse in January and it’s all over for our ancient buildings.”
Rev Canon Neil Kelley, rector of St Laurence Church in Chorley, warned that VAT relief cuts have made it impossible to repair the roof in one go, adding £125,000 to the total cost.
He said,
“We have to do the project in two parts, and that unfortunately means paying for two lots of scaffolding, which costs an absolute fortune.”
Rev Kelley said the delay and threat of the scheme have increased challenges for the church, including providing free meals, food parcels, and debt support through Christians Against Poverty.
St Levan Church in west Cornwall faces major repairs to its slate roof, with rusted iron fastenings needing replacement at an estimated cost of £400,000.
John Iles, vice chair of the parochial church council, said the uncertainty over the scheme’s future has halted work, stating,
“We don’t want to start and then run out of funds.”
What did a new poll reveal about public support for church repairs funding?
Savanta research shows 59% of Britons support government help for church repair costs.
According to a poll of 2,018 UK adults conducted for the Church of England, 77% agreed that historic churches and cathedrals are national treasures.
The Bishop of Ramsbury, Rt Rev Andrew Rumsey, said the survey highlights the importance of churches and calls on the chancellor to extend the exemption beyond the current scheme ending March 2026.
How did the Government respond to concerns over listed places of worship?
The Government has not promised support for the scheme beyond March or commented on any upcoming tax policy changes.
Heritage Minister Baroness Twycross told the select committee in July that decisions on tax exemptions fall to the Chancellor and are considered at fiscal events within the broader context of public finances.
According to a Culture Department spokesman, listed places of worship
“serve as vital community hubs for faith communities whilst providing valuable services to the wider public”
and that many
“are buildings of exceptional architectural and historical significance that form an integral part of our national heritage”
The department declined to comment on changes to tax rules, saying that other financial support, including the National Lottery Heritage Fund, is available.
What is a VAT?
The VAT (Value Added Tax) is standard VAT rate is 20%, which applies to most goods and services, including clothing, electronics, and fuel.
Zero-rated or exempt UK VAT goods and services include most food and drink, children’s clothing and footwear, books, newspapers and magazines, prescription medicines, and some medical equipment.
