David Robertson: Pray for a rethink on VAT plans

The Church of Scotland and the other major Christian denominations in Scotland – all of which sit on the Scottish Churches Committee – are responsible for thousands of listed buildings.

The Church of Scotland alone is accountable for nearly 1400 churches.

Throw in the property assets of other denominations such as the Roman Catholic Church in Scotland and the Scottish Episcopal Church, and you have a considerable total.

Alterations to churches are generally undertaken to make old buildings usable not just by congregations but by the wider community. In this sense, alterations make a major contribution to social capital, which must surely be an objective of David Cameron’s “Big Society”.

These projects create jobs, maintain places of worship for current and future generations, and provide vital resources for the communities around them. These are a world away from the type of “luxury” alterations which the government has identified as abuses of the system.

Congregations, all of whom are registered Scottish charities, are themselves responsible for meeting the cost of alterations and many struggle to do so, particularly given the prevailing economic problems which are well documented.

It was therefore a very unpleasant surprise for those of us who value our heritage and want to see it continue in use when George Osborne announced in his Budget last month that he intends to remove the zero VAT rating on alterations to listed buildings.

The Church of Scotland believes that Mr Osborne’s proposals, which are due to take effect on October 1, are utterly misguided. It is not only buildings that belong to Christian denominations that will be affected, but also places of worship such as mosques and synagogues.

Expecting congregations to raise an additional 20 per cent when the cost of alterations can run into hundreds of thousands of pounds will undoubtedly cause many projects to fall by the wayside. For those currently planning or considering alterations projects, it throws a great deal of uncertainty into the equation and makes it impossible to budget for these projects.

As secretary and clerk to the General Trustees, the property-holding corporation and registered charity which owns the majority of Church of Scotland buildings, I have already spoken to various congregational representatives who assure me that the impact of Mr Osborne’s tax on listed places of worship cannot be overstated.

Since 2001, the Listed Places of Worship Grant Scheme has provided a vehicle through which the cost of VAT on repairs – as opposed to alterations – can be reclaimed.

Although it has been rumoured this scheme could be expanded to include alterations, nothing has been confirmed and this would be a far from ideal solution.

The scheme is currently returning less than half – 47 per cent – of the VAT on repairs and for a congregation to successfully claim reimbursement, it would still have to meet the cost of VAT in the first place.

If the zero rating is removed, congregations may decide against alterations projects on the grounds of cost. It is a lose-lose situation if buildings are lying empty and the Treasury does not receive the tax income it was hoping to. Nobody wins.

The General Trustees have written to David Gauke MP, Exchequer secretary to the Treasury, asking for the proposal to remove the zero rating to be reconsidered in relation to places of worship.

There is still time to write to Mr Gauke and make your views known on this subject as the consultation period runs until May 18.

We would urge all our congregations and presbyteries, along with representatives of other Christian denominations and religious faiths that will be affected by the removal of the zero rating, to write to Mr Gauke.

If we embark on this route there is no turning back. EU legislation does not allow zero ratings to be reinstated, or new zero ratings introduced.

We must act while there is still time.

• David Robertson is secretary and clerk of the Church of Scotland General Trustees

LET US PRAY FOR A RETHINK

• The A-listed St George’s West Church in Shandwick Place designed by David Bryce, and built on the corner of Shandwick Place and Stafford Street in 1866-69.

• The A-listed St Stephen’s in St Vincent Street was designed by the architect William Henry Playfair and opened on December 21, 1828.

• The A-listed Nicolson Square Methodist Church was designed by Thomas Brown in 1815.

• The A-listed Dalmeny kirk is the focal point of Dalmeny Village and is one of the best-preserved Norman parish churches in Scotland. It was built in the early 12th century and has 17th-century additions, with the tower constructed in 1937.