Take VAT - UK Government Jeopardise the future of Listed Buildings

It appears that our government are prepared to role the dice and jeopardise our heritage on something that is likely to make an insignificant contribution to our national debt (additional VAT income), but significantly increase deterioration and disrepair of our listed buildings.

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Sometimes policies/decisions are made which make you wonder whether those who make them have really thought through the implications and potential benefits of what they are proposing.  One such policy is the proposed removal of VAT exemption for alteration and restoration works to listed buildings.

'On 1 October 2012, the government is lifting the exemption on VAT to listed buildings, which it terms an ‘anomaly’, and imposing VAT at 20 per cent to all alterations and restorations in a move which will cost owners of listed buildings thousands of pounds just to ensure their property does not fall into disrepair' (RICS 2012)

Anyone who has had the pleasure of living in or working on a listed building will know that any works demand a higher level of consideration in terms of detailing, materials, workmanship and liaising with the local authority planning department, in comparison to a building that is not listed.  This ultimately impacts on cost, which can increase significantly to meet the requirements of a listed building consent. It is no surprise therefore that custodians of listed buildings sometimes struggle to keep listed building in a reasonable state of repair and sadly, these buildings fall into disrepair, become neglected and sometimes even derelict.

Local authorities have the power to issue statutory repair notices to enforce custodians to undertake emergency and other essential works to a listed building, however as stated above, these works are likely to be costly and the custodian may struggle to find the funds to comply with the requirements of the notice.  This problem is likely to be exacerbated by an increase in costs of 20% when the VAT exemption is removed later this year, resulting in the possibility of essential works not being undertaken and continued deterioration of the very buildings that legislation is there to protect.  It seems to be a contradiction that the government can pass legislation where they aspire to protect the heritage of this country, such as Planning (Listed Buildings and Conservation Areas) Act 1990, by placing significant restrictions on what can and cannot be done to a listed building. Then on the other hand make it difficult from a financial point of view to fulfil the requirements of the listing, by not offering VAT relief on the works.  Can the government expect to have it both ways?

In their publication 'Stopping the rot' English Heritage define the importance of protecting our past very well:

'This nation’s historic buildings are a shared legacy; once lost they are lost forever. So saving England’s neglected heritage is a challenge for us all. It will only be overcome so long as government, private owners and the voluntary sector work together to breathe new life into these irreplaceable but sometimes neglected places.'

The interesting thing about the above statement is the co-ordinated approach required of private owners, the voluntary sector and the government!  It appears that our government are prepared to role the dice and jeopardise our heritage on something that is likely to make an insignificant contribution to our national debt (additional VAT income), but significantly increase deterioration and disrepair of our listed buildings, when works become even more expensive.  This is a typical example of a blinkered approach by the government where they have failed to think through the implications of their policies, and one which is likely to result in a very uncertain future for many of our listed buildings.

When debating the removal of VAT exemption in parliament there was talk of discretionary grants for certain types of buildings.  Anyone who has ever applied for government grants before will know of the endless form filling and vast amount of information that is normally required, with a limited likelihood of obtaining the grant in question.  If the government were serious about protecting our heritage, surely it would make sense to incentivise works to listed buildings rather that de-centivise, which is what will actually happen!  At what point will the government realise that this is something they should have left alone?  As English Heritage point out, 'once lost they (listed buildings) are lost forever'.

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