Churches to pay VAT on maintenance and repairs

Conveyancing Data Services has highlighted the closing of a VAT loophole by George Osborne in last month’s Budget.   Currently Listed Buildings, including those that are listed as places of worship do not have to pay VAT on any restoration.  
With this loophole closing, parish councils and places of worship will see a 20% increase in their repair bills.  This may affect funding in churches considerably.  Matthew Joy, Director of Conveyancing Data Services suggests that there are three possible effects.
The first is that parish councils will be pushed towards their parishioners to cover maintenance and repair costs.
The second is that there may be an effect on those donors to places of worship, as 20% of what they contribute to repair costs would now go to the government in tax.
The third possible effect of the closing of the VAT loophole is that more parish councils registering the right to claim for chancel repair costs at the Land Registry. 
Matthew Joy comments that “Whilst we haven’t seen many of this type of registration appear yet (personally I have only seen 2 historic entries in the last 12 month), there is still plenty of time for them to do so, the deadline being October 2013, and this could easily be the straw that broke the camel’s back.”
It may be a sensible option to consider chancel liability insurance in areas where this may become an issue.  It can be an inexpensive protection against costs which may jump by 20%.  
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