A round-up of topical VAT issues affecting the charity sector
Places of worship grant scheme extended
In the March 2012 Budget, the Government announced the withdrawal of the VAT zero-rating for approved alterations to listed buildings with effect from 1 October 2012.
At that time, the Government also announced that it would extend the grant scheme offered by the department of culture, media and sport (DCMS) to incorporate approved alterations to listed places of worship to mitigate the removal of the zero-rating.
Under the extended scheme, grants may be claimed towards the VAT paid on the approved alterations. The existing scheme will also be simplified so that the same eligibility conditions apply for both approved alterations, and repairs and maintenance.
Some minor changes will be made to the scheme, including:
- a return to monthly payments from November 2012
- the removal of restrictions on claims for plumbing and electrical work, kitchens, toilet fittings, floor coverings, handrails, decoration work, repair work to pews and asbestos removal
- the inclusion of claims for security systems to prevent crime.
In addition, DCMS and HM Treasury have announced a review of grants for the VAT element of costs not paid for by an insurance company, with a view to removing such claims from the grant scheme from April 2013.
The extended scheme and the aforementioned changes came into effect on 1 October 2012 and full details of how the scheme will work and the new application form are now available on the listed places of worship grant scheme website (www.lpwscheme.org.uk).
Cost-sharing exemption
In past editions of the Charities bulletin, we have reported on proposals to introduce a VAT exemption for services supplied between specified organisations, including charities.
The relevant legislation has now been enacted and HMRC has recently issued guidance on how the exemptions will be applied. VAT Information Sheet 07/12 can be found on the HMRC website.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
