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Approved alterations to listed buildings – The end of zero rating

Posted on 21st April 2016 by

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One measure you may have missed from this years Budget was the removal of zero rating for approved alterations to listed buildings. This was one of the items contained within the consultation document that claims to be addressing ‘Borderline Anomalies’.

HMRC argue that the rules need changing because the availability of zero rating gives owners an incentive to change their building rather than to repair plus the borderline between repairs and alterations is a cause of much confusion resulting in a high volume of taxpayer queries and errors. More cynical readers may think that the estimated VAT saving for the Treasury of £100M per year may have more than a little to do with this change.

This is bad news for many people. It is not just wealthy individuals who may live in a listed country pile. Many ordinary families and charities will be adversely affected. There is some relief for those with listed places of worship as the existing scheme administered by the Department for Culture, Media and Sport is to be extended to allow an increased grant claim to reflect the additional VAT due on works of approved alterations carried out from 1st October 2012.

There will be anti avoidance measures to prevent the owners of listed buildings from entering into pre-payment schemes with a view to having work invoiced prior to it being done. Where there are binding contracts for the work already in place that were entered into prior to Budget day (21st March) then the availability of zero rating will continue through to 31st March 2013.

If you are a householder or charity who has a listed building that requires some alterations to be carried out in the near future you might want to consider whether you might arrange to have the work done sooner rather than later.

For further details please contact alternatively please call 0845 880 0320.

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