HM treasury has responded to the petition promoted by the Listed Property Owners’ Club to reduce VAT to 5% on repairs and approved alterations to listed buildings. The petition, which closes on 2 January 2019 and has reached 11,282 signatures so far, stemmed from LPOC’s awareness of a reduction in certain types of applications for listed building consent. This is due to the removal, since 2012, of the zero rate of VAT for pre-authorised alterations to listed buildings.
However, despite the recognition that listed buildings are part of the Historic Environment and reaffirming Government’s support to heritage, the Treasury response states that “the government has no plans to change the VAT treatment of renovations and repairs at this time”. Introducing a reduced rate is estimated to cost the Exchequer at least £2.5 billion a year and this would have to be balanced by increased taxes elsewhere, reductions in government spending, or borrowing.
A 2014 briefing from The Heritage Alliance showed that a reduction in the rate of VAT on housing renovation and repair work in a 5-year period would have several positive impacts, with benefits to the economy and the environment.