VAT warning from LPOC

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VAT warning from LPOC

Postby Simon TL » Fri Mar 23, 2012 3:59 pm

VAT Savings to be withdrawn from Listed Buildings works

Yesterday, the Chancellor of the Exchequer made an astonishing, and unexpected, announcement that will affect a significant number of owners of listed properties in the UK.

In short, the VAT relief that currently applies to alterations to listed buildings is being withdrawn with effect from 1 October 2012. The Chancellor described the existing relief as an ‘anomaly’, which “gives a perverse incentive for change as opposed to repair”. He also considers that the majority of the work covered by the relief consists of “extension work which is not necessary for heritage”. Admittedly, extensions currently qualify for VAT relief at present, but it does not give a true picture of the type of work that owners carry out, and which frequently qualify for relief.

Dave Brown, the LPOC’s VAT adviser commented “The majority of projects that I get involved with are simply restoration jobs – and with VAT at 20% being payable on these works in future, home owners are likely to ‘make do and mend’ – or else purchase non-listed buildings next time. The end result, unfortunately, is that many historic buildings will simply fall into a state of disrepair.

Listed property owners have a hard enough time looking after the often fragile state of their homes that any disincentive introduced will, in the long-term, damage the heritage of the United Kingdom.” A consultation exercise has been introduced, and we invite all owners to contribute to it.

David Roberts, HMRC, VAT Projects Team, 3C/10, 100 Parliament Street, London, SW1A 2BQ

Alternatively, as this measure deserves the widest possible reaction, we urge you to contact your MP as soon as possible.

Please also contact LPOC with your comments on or LPOC, Lower Dane, Hartlip, Kent, ME9 7TE
Simon TL
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Re: VAT warning from LPOC

Postby James » Wed May 09, 2012 10:21 am

Simon TL wrote:Dave Brown, the LPOC’s VAT adviser commented “The majority of projects that I get involved with are simply restoration jobs – and with VAT at 20% being payable on these works in future,

Your VAT adviser seems not to have realised that VAT has always been payable on restoration jobs at 20%. I'd sack him if I were you. Only alterations give rise to 0% VAT.

This is one of the better pieces of proposed legislation in the budget as it removes the perverse incentives to owners of listed properties to alter rather than to repair.
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Re: VAT warning from LPOC

Postby Simon73 » Mon Jun 04, 2012 11:13 am

Unfortunately there does seem to be a certain element of subjectivity when it comes to what actually constitutes an alteration. My case in point being that I am currently looking at 'restoring' a main oak beam in my dining room. What currently acts as a beam can only be described as a collection of inadequate soft wood timbers and noggins that were clad in hardboard and painted white. Most likely installed in the late '70's before the property was listed due to the original beam being rotten and more than likely a cost cutting exercise. Whatever the case it is gruesome, certainly not in keeping with what you'd expect to find in a late 17thC cottage and my structural engineer friend tells me it isn't up to snuff in the 'fit for purpose' stakes.
So, I consult my conservation officer on the idea of removing said monstrosity and restoring what would have been there originally i.e. a nicely chamfered thick, sturdy oak beam.
Apparently this is considered to be an alteration and so requires LBC.
I say it's restoration as it is removing something that shouldn't be there and replacing with something that should. I'm not altering anything at all.
Needless to say my argument held no sway with the local authority but I guess I can look on the bright side and claim VAT relief (assuming of course that the LBC form is processed and approved before October).
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