Call to lobby Government on reversal of Heritage Tax

HTF agree completely with Loyd Grossman, Chairman of The Heritage Alliance’s excellent letter to The Times calling for a reversal of the budget measure to withdraw the zero VAT concession on approved alterations to listed buildings. The letter can now be viewed  on the Heritage Alliance website at

As Loyd says, the Chancellor has conceded that the proposal would inflict huge damage on historic places of worship. It is clearly in the long term interest of the country to retain the zero rating for all building types and for all owners.

Now that the pasty tax, the caravan tax, and the charity tax have been over turned, this is a critical time for the heritage sector.  We urge you to bring pressure to bear on any contacts you have in Westminster or Whitehall. Please see below the parliamentary briefing already sent by The Heritage Alliance to 85 or so MPs:

Withdrawal of VAT relief on approved alterations to Listed Buildings: briefing 3

29 May 2012

The Heritage Alliance believes the Government’s rationale for withdrawing VAT relief from alterations to listed buildings is fundamentally flawed.

We are calling for the VAT exemption for approved alterations to listed buildings to be retained, irrespective of building type or ownership.

The Government’s rationale is flawed because:

1.    Our Freedom of Information request reveals lack of evidence

The evidence for the Budget proposal to remove the zero rate of VAT over approved alterations to Listed Buildings is inadequate, and misleading over the level of abuse.

HMRC’s reply to our FoI request reveals:

  • their evidence consists of a sample of just over 100 cases (out of 29,000 listed building consent decisions 2010-11). This inadequate sample has been used to imply that this significant EU concession is unnecessary for heritage purposes
  • HMRC is unable to substantiate the Government’s  assertion that this ‘loophole’ is being abused to get tax relief on swimming pools, admitting “HMRC does not hold information on the breakdown of the total number of alterations by the type of alteration or by the number of swimming pools that have been installed”. This mischievous assertion has misled the debate by implying widespread abuse.

The evidence base justifying the Government’s proposal has been found to be lacking in substance and rigour, and its unsubstantiated press lines to be disingenuous.

2.   The consultation process for such a fundamental change of policy is inadequate

The consultation process is a far cry from usual Government Code of Practice. Instead of three months, the initial consultation deadline of 4 May (six weeks) was extended only to 18 May (eight weeks).

And the consultation does not comply with the first criterion of the Code, that “formal consultation should take place at a stage when there is scope to influence the policy outcome.”  Instead HMRC’s consultation document “VAT:  Addressing borderline anomalies” states: This consultation is being run for this shorter time as the legislation introducing the changes will be laid in the summer”, implying the outcome of the consultation is pre-determined.

These procedural shortcomings are particularly acute when considering that this decision is irreversible; this rare EU tax concession once lost can never be replaced.

3.   Strong consensus the impact will be greater than estimated

The clear consensus from the many letters and consultation responses copied to us is that the additional 20 per cent cost will have a much stronger adverse impact on desirable heritage work than the Government predicts - not only on the sustainability of our historic building stock but also on the level of construction work undertaken. Numerous schemes are being curtailed or cancelled, damaging not only our heritage but also local businesses and volunteer-led initiatives.

The Chancellor’s increase of £30m (to 2015) to the Listed Places of Worship Grant Scheme (17 May) concedes that the imposition of VAT will damage our heritage. It is nonsensical to recognise the damage to listed buildings in the hands of religious bodies, but not to those in the hands of community groups, small businesses and private owners. The Chancellor has favoured one building type but there are many other secular listed buildings, such as community centres and village halls, which face similarly acute challenges in raising money to give them a viable twenty first century lease of life.  Private owners also face higher costs for renovating listed buildings, and this renovation of our built heritage is very much in the public interest.  The Government’s proposal is an inadequate and inequitable ‘solution’.

4.  The public benefit of nationally designated heritage assets is ignored

The three per cent of buildings in this country that are Listed are, by definition, a public good. All owners of listed buildings take on responsibilities for the finest of our outstanding heritage on behalf of the nation, supporting economic growth through heritage led regeneration, tourism, construction and as a huge resource for the fast-growing creative industries. Whether they are congregations, local community groups, charities or private individuals, all owners deserve recognition. This is no time to be adding 20% to their costs.

This makes listed buildings unique amongst the categories of goods affected by this Statutory Instrument (hairdressers’ chairs, takeaway food, sports drinks). All our listed buildings are specifically designated as national assets for present and future generations. They should not be the victims of an HMRC drive for tidiness in their own internal operations.

For these reasons:

  • The Heritage Alliance calls for this Budget measure to be withdrawn
  • There should be no special treatment - the zero rate for approved alterations to listed buildings should be retained for all listed buildings, irrespective of building type or ownership.

CONTACT: For further information contact: Kate Pugh, Chief Executive, The Heritage Alliance 020 7233 0800 10 Storeys Gate, Westminster, London SW1P 3AY.


The Heritage Alliance is the largest coalition of heritage interests in England. Together its 92 members own, manage and care for the vast majority of England’s historic environment. Alliance members range from specialist advisers, practitioners and managers, volunteers and owners, to national funding bodies and organisations leading regeneration and access projects. Their specialist knowledge and expertise across a huge range of issues - regeneration and asset transfer - is a highly valuable national resource, much of which is contributed on a voluntary basis for public benefit. They are in turn supported by over five million members and thousands of local volunteer groups.