Listed building VAT relief for residential property was
abolished in 2012. At Withers we have taken some soundings
concerning any changes in the behaviour of residential property
owners arising from the removal of VAT relief on approved
alterations. We have asked whether this has caused more or
less to be spent on repairs, and whether the extra cost of
maintaining a historic dwelling has caused people to choose newer
buildings which, whilst lacking a certain charm, may be more
functional if only by reference to reduced ‘red tape’
and associated costs.
We have found that, as yet, little provable impact has arisen from
these changes. This may be because it is simply too early for
people to feel the impact directly. Anyone who had made a
listed building consent application prior to the trigger date of 21
March 2012 will, in any case, be covered by the old relief until
the end of September 2015. For those who ‘missed the
boat’ the extra costs they have incurred may yet have an
impact on such things as the budget left over for repair, and in
any case they may have committed themselves to a plan of works
prior to the announcement that the VAT relief would be
unavailable.
For these reasons we are still keeping a watching brief over this
area. To a great extent there is little that can be
done. The abandonment of the zero rate for listed building
alterations was a ‘one-way street’ since, under EU law,
the zero rate cannot be reinstated. That could be affected by
any renegotiation of the terms of the UK’s membership of the
EU, but despite recent political comment to the effect that control
over our VAT rates would be a major plank of renegotiation, it is
little short of inconceivable that our European partners would
allow us to reinstate zero rates which have only been held over
since the 1970s under ‘transitional provisions’.
Of course, if the UK should decide to leave the EU entirely, then
our VAT rates become entirely a matter for our own
government.
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