VAT relief on listed building alterations to be abolished

The government has proposed abolishing VAT relief on refurbishing listed buildings in what one observer predicted would significantly harm heritage specialists in the industry.

In a document released alongside today’s Budget, HM Revenue & Customs said a consultation would be held until early May on proposals to scrap that the tax relief on “approved alterations” to listed buildings as part of a move to simplify VAT rules.

Such improvements to listed buildings are currently zero-rated for VAT while repairs attract the full 20% rate. The proposal is to bring approved alterations up to the same level as repairs from October 1^st.

Noble Francis, economics director of the Construction Products Association, said the move would hit a niche part of the industry already suffering since the recession.

“This is only going to cause the heritage sector more harm,” he said. “But ironically, it could speed up work on heritage buildings before October because people who wish to alter listed buildings will want to do so in the next six months.”