To ask the Chancellor of the Exchequer (1) if he will estimate the cost to the Exchequer of extending VAT relief to church buildings which are not listed but are within conservation areas; (94908)

European agreements governing the application of VAT reliefs mean that while the Government can retain the existing VAT zero rates, such as those which apply to approved works of alteration to certain listed buildings, we cannot extend these or introduce any new zero rate reliefs. It is therefore not possible to introduce a zero rate for alteration or repair works carried out to unlisted church buildings.

Outside the VAT system, the Department for Culture, Media and Sport operate VAT refund arrangements to return in grant aid the equivalent of the VAT incurred in making repairs to listed places of worship.

Restricting VAT refund arrangements to listed buildings ensures that benefits are targeted on those places of worship that are formally recognised as having special architectural or historic interest. The refund arrangements remove any VAT costs associated with the repair, rather than alteration, of these buildings, and also recognise that their repair and maintenance generally requires specialist craftsmen and costly materials, the cost of which often fall on small congregations.

HM Revenue and Customs is not able to estimate the cost of extending the VAT relief or VAT refund scheme to unlisted places of worship in conservation areas. This is because there are no central statistics on the number of unlisted church buildings, and no data on those located within conservation areas.