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Listed churches expect to lose out on VAT after grants scheme capped

MORE than 100 Anglican churches and cathedrals are engaged in building projects that will exceed the £25,000 cap on the Government’s Listed Places of Worship Grant Scheme (News, 24 January) and are in progress or due to begin this year, it has been reported this week.

The figures were gathered by Church House, from replies to a data request sent to every diocese and cathedral. (Replies were received from 34 and 18 respectively.)

The estimated value of works due to begin this year or early in 2026 is £163 million. At least 38 churches and cathedrals are undertaking works valued at more than £2 million, attracting VAT of at least £400,000. A total of 41 are undertaking multi-year projects, which will rely on a long-term funding solution from the Scheme; 43 are in receipt of National Lottery Heritage Fund funding.

Many of the projects are in deprived areas. Blackburn Cathedral is currently engaged in a relighting project designed to address health-and-safety and energy-efficiency issues, and expected to cost £400,000.

The Labour MP for York Central, Rachael Maskell, told MPs last month that St Michael-le-Belfrey, York was set to lose out to the tune of £1.5 million, “even though it has done everything that was expected of it”.

“Our historic churches and cathedrals are a precious inheritance for the nation in so many ways — culturally, socially, and spiritually,” the co-lead bishop for church buildings, the Bishop of Ramsbury, Dr Andrew Rumsey, said on Tuesday. The cap “brings deep concern to churches and cathedrals already committed to larger, long-planned and locally fund-raised repair projects, with works already under way or soon to start”, he said.

“Such churches now need to raise considerably more funds from already stretched communities, especially in deprived areas where social outreach from churches offers a lifeline. We are grateful for the Government’s recent recognition of churches’ contribution to the common good and request that this is demonstrated in the permanent reinstatement of the Scheme at its former level.”

The Second Church Estates Commissioner, Marsha De Cordova MP, told the House of Commons last month that it was “important that the Department for Culture, Media and Sport (DCMS) comes up with a solution to ensure that the Listed Places of Worship Scheme can continue”. The Conservative MP for Christchurch, Sir Christopher Chope, has tabled a Private Members’ Bill to make repairs to listed places of worship exempt from VAT.

Not only have grants been capped, but the scheme has been extended for one year only and capped in total at £23 million. The Minister for Creative Industries, Arts and Tourism, Sir Chris Bryant, told the House of Commons this month that the one-year commitment reflected a desire to fit in with the Government’s spending-review process, which is set to take place this spring and to cover a three-year period. Analysis suggested that 94 per cent of bids were for less than £25,000, he said. “Obviously, if multiple schemes are engaged, people can make multiple claims. Any claims that are received up until the end of this financial year are, of course, not subject to that cap.”

The national Church Buildings Team is encouraging people in churches affected to raise the issue with their MP. The Church’s parliamentary team has already written to more than 240 MPs whose constituencies include churches affected by the change. The team is also encouraging people to complete a DCMS survey about the scheme (News, 7 March). The deadline for doing so is Tuesday 25 March.

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