(Photo: National Churches Trust)
In a significant shift affecting historic places of worship, financial strain is mounting on churches due to recent policy changes under the Starmer administration. The National Churches Trust (NCT) has voiced concerns over the termination of a longstanding VAT exemption, initially established during Gordon Brown’s tenure as Chancellor.
Launched in 2001, the Listed Places of Worship Grant Scheme allowed churches to reclaim VAT on repairs, intended as a short-term measure but extended by successive governments until now. This scheme is set to conclude on 31 March, but reports indicate that its funds have already been depleted.
The original budget of £42 million for the scheme was significantly reduced by Starmer’s government to £23 million, which has been fully expended. The impending transition to the Places of Worship Renewal Fund brings uncertainty, as churches await clarity on future government support.
While the Church of England acknowledged the introduction of the new scheme, it cautioned about potential challenges, stating that the changes could impose “added pressure on local fundraisers and inevitably a drain on other sources of funding”.
The NCT has expressed apprehension about the new scheme’s budget constraints and its subjection to tax. Sir Philip Rutnam, Chair of the NCT, highlighted the precarious situation, stating, “Today, 21,000 historic places of worship, the vast majority churches, will start bearing the cost of new taxes.”
“After 25 successful years, the government has removed a lifeline for churches which was introduced by a Labour Chancellor in 2001, allowing them to reclaim VAT on repairs,” Rutnam continued. He emphasized the heritage risk, noting that “with 1000s of churches at risk, this is yet another blow to our national heritage as many will now be unable to pay for urgent repairs.”
This article was originally written by www.christiantoday.com
