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VAT (Church Buildings)

Volume 451: debated on Wednesday 1 November 2006

To ask the Chancellor of the Exchequer (1) what discussions he has had with other EU countries about extending VAT relief to church buildings which are not listed; (97110)

(2) what assessment he has made of the merits of extending VAT relief to church buildings which are not listed.

European agreements governing the application of VAT reliefs mean that while the UK can retain its existing VAT zero rates, such as those for approved works of alteration to certain listed buildings, we cannot extend them or introduce new ones. It is therefore not possible to zero-rate alteration or repair work carried out to unlisted church buildings. Furthermore, the same agreements do not allow for the application of reduced rates in this area.

The Government recognise that listed places of worship are not just an essential part of our religious life but an important part of the history and fabric of our country, and that the need to use specialist craftsmen and costly materials means their upkeep can be a heavy burden, particularly on small congregations. That is why the Government have pressed the case at EU level for their repair and maintenance to be added to the supplies for which a reduced rate of VAT is available. However, while we recognise the importance of all places of worship within their communities, we also recognise that listed status means that the special architectural or historic interest in the church in question has been acknowledged and as such special tax treatment is justified on this basis.