Thursday, May 17, 2012

VAT compromise on listed places of worship

The Government has agreed to a compromise arrangement on charging VAT for repairs to listed places of worship. The VAT reform is staying in place, but alongside it the government are adding £30m to a grants pot for repairs to listed places of worship, and ring-fencing the funding for the rest of the parliament. The pot had originally been cut to £7m, and will now be £42m. For comparison, £23m of VAT rebates had been given in 2010-11, so there is more than enough to make up for the costs.

Having said that, it does seem needlessly bureaucratic to levy the VAT, then administer a fund to route it back to listed places of worship in grant form. The arrangements are pretty explicit: From 1 October 2012 all claimants should receive a full payout on the equivalent of the VAT they have incurred on repairs and alterations to listed places of worship.Wouldn't it be easier, and more cost-effective, to abolish the fund and put an equivalent tax cut in its place?

Anyway, good news, and it shows that the government will listen if you lobby hard and well. Which is nice for each single issue, though the danger is that every policy becomes shaped by interest groups and lobbying, rather than a coherent central strategy, and the whole thing unravels.

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