Holy Get Tax Breaks In The UK

by Jason Gorringe, Tax-News.com, London

07 December 2001

The UK government announced on Tuesday that architecturally listed churches, synagogues, temples, and mosques are to receive grants which will compensate them for around two-thirds of the amount of VAT they pay for repairs.

Currently, places of worship are obliged to pay 17.5% VAT on maintenance and repairs, but the new grants, which were announced in the budget in March, will reduce this to 5%, which equates to an estimated tax saving for eligible buildings of around £30 million.

It looks as though the Church of England is likely to benefit most from the new initiative, as the VAT on its yearly repairs and maintenance bill comes to around £40 million, and 13,000 of its 16,000 churches (and all of its 43 cathedrals) are listed buildings.

According to government sources, the grants are only an interim measure, and are set to be replaced in 2003 by a permanent cut in VAT for listed places of worship. However, for the time being, the UK's religious communities will have to content themselves with the grant scheme, which, it was announced, will apply retrospectively from 1st April 2001.

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