Osborne offers £30m church grants after storm over VAT bills

THE Government has caved in to pressure over its new tax on church renovations and pledged £30m to ensure schemes such as the refurbishment of Wakefield Cathedral will go ahead.

The partial U-turn by Chancellor George Osborne on the so-called Heritage Tax yesterday will give fresh hope to campaigners in East Yorkshire who want similar concessions over another of the Treasury’s controversial VAT changes – the new 20 per cent levy on static holiday caravans.

The Treasury consultation into the Caravan Tax and various other VAT changes closes today, its deadline having been extended by an extra fortnight following a major rebellion by backbench Conservative MPs. A final decision is expected later this summer.

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Mr Osborne moved to head off concern about the impact of his decision to start charging VAT on alterations to listed buildings by offering a huge grant to compensate churches.

He said: “The Government will provide £30m to the Listed Places of Worship scheme.

“That will be 100 per cent compensation, exactly as we promised in the Budget, for the additional cost borne by churches for alterations, and should also go a long way to helping the situation with repairs and maintenance.”

The announcement will be particularly welcome in Wakefield, where long-overdue repairs of the Cathedral had stalled due to the requirement to raise money to pay the extra 20 per cent tax.

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But the Dean of Wakefield’s wife, Pamela Greener, warned the grant was only a temporary measure and will not be available to other types of listed building.

“It would be churlish not to welcome the Government’s increased funding following their shock budget tax raid on the nation’s heritage” she said.

Churches form an important part of the nation’s heritage – but they don’t have a monopoly over it. This proposal offers short-term church relief, en route to long term church uncertainty – accompanied by immediate additional expense for everyone else.”