VAT rules are creating perverse incentive to destroy historic buildings rather than repairing them: Dr James Legard

But the cost of maintaining and repairing our historic buildings is a huge burden. It takes skilled, specialist craftspeople, techniques, and materials.

And this financial burden is made heavier by the UK’s current VAT regulations. As someone who works both an architectural historian and as research lead for the heritage sector at Harrogate’s Harlow Consulting, I see these challenges all the time.

In part of my life, I help owners and managers understand, conserve and develop their heritage buildings. In the other, I help heritage bodies answer the questions that can identify the issues facing the sector and provide the foundation for solutions.

And on both sides the message is the same: that the UK’s VAT makes it harder to maintain our heritage.

Residential new builds enjoy zero-rating, but the UK’s VAT system imposes a 20 per cent tax on repair and maintenance work for historic buildings.

This disparity creates a perverse incentive for owners and developers to favour new builds over the conservation of existing structures. It can be more cost effective to destroy and build new, than repair and maintain.

For heritage buildings, the tax burden can be particularly onerous—particularly for private owners unable to run their homes as businesses and reclaim their VAT.

As a result, historic properties may fall into disrepair, unable to generate sufficient income to cover their high repair costs.

It’s for these reasons that Historic Houses commissioned us to conduct a survey of owners of such buildings and help collate evidence of the impact of VAT on heritage repair and maintenance. Historic Houses is the UK’s membership organisation for privately owned heritage.

Their perspective is national, but as a local I’m keenly aware of the research’s relevance here.

It was recently announced that Ripley Castle is for sale after 700 years of being in the same family. One can only imagine that costly repairs and maintenance of the Grade I listed building must have formed part of the decision making.

Critics may argue that reducing VAT on repairs would lead to a significant loss of revenue for the government. However, this overlooks the broader economic benefits of a thriving heritage sector.

By ensuring that historic buildings are repaired and maintained, the government will be making a long-term investment.

Tourism and the creative industries are some of the UK’s fastest growing sectors. The critics also forget that without intervention, we not only risk the loss of irreplaceable heritage but the erosion of Yorkshire’s unique character.

And it’s often at this point, when buildings are about to be lost, that the taxpayer has to step in anyway – by which time much of the damage has been done.

At Ripley itself, the amazing orangery and garden buildings were long on Historic England’s Heritage at Risk Register. Only grants totalling nearly £500,000 have been able to save them.

Maybe it would have made more sense to have a tax regime which helped owners prevent them getting into that state in the first place?

But to make that case to government, we need to turn the message we’re being given into hard evidence. Historic houses are not merely relics of the past; they are living components of our cultural identity and community life.

Dr James Legard is an Architectural Historian and Research Specialist, Harlow Consulting.