We welcome the Heritage Alliance’s calls to reduce VAT
— 01 Nov 2017
Jonathan Rhind Architects welcomes the recent discussions by The Heritage Alliance to the Office of Tax Simplification (OTS) and its call for the reduction of VAT on works to listed buildings, housing renovation and repair work.
The Heritage Alliance is England’s largest coalition of independent heritage interests. The Alliance believes that the current VAT complexities incentivise the loss of our built heritage and that the current VAT regime is one of the biggest threats to the future of our heritage and the industries it supports, such as tourism.
The UK’s departure from the European Union could prompt a review of value added tax (VAT) on building repair and maintenance works.
In its report ‘Building Better Places’, the House of Lords committee on the built environment highlighted concerns that the 20% VAT rate “provides a perverse disincentive to the retention, restoration and revitalisation of historic buildings, and works to prevent owners from looking after them properly”
“under the current legal framework set by the EU, the zero-rate of VAT can only be applied to residential or charitable property that is either newly constructed, converted from commercial to residential use, renovated after a prolonged period without use, or is a listed building that has been substantially reconstructed”.
In July the Alliance met with the OTS to discuss its concerns and highlighted a report by Experian, commissioned by the Cut the VAT Alliance, on the benefits of cutting VAT from 20% to 5%.
Benefits outlined in the report include its creation of a huge economic stimulus of more than £15bn, the creation of more than 42,000 extra full time equivalent construction jobs and an additional 53,000 jobs in the wider economy, in the period 2015 - 2020.
“Reducing VAT may also help to stamp out cash in hand work as the incentive to avoid VAT would be much reduced.
“It would also support the UK’s tourist industry by making it cheaper for owners to maintain their properties creating attractive places for tourists to visit.”