Tax rise for listed building work in blatant short termism

Despite strong resistance from the BWF and a number of other organisations, the government has gone ahead with plans to remove the zero VAT rating on approved alterations to listed buildings.

The proposed measure was announced in the 2012 Budget and would add 20 per cent to the cost of alterations approved under listed building consent. The BWF’s view is that, given the benefits that the nation would see from an improvement in the fortunes of the construction sector, the HMRC is mistaken in implementing a measure that would actually lead to a fall in construction activity, particularly one which would affect a number of manufacturers of quality joinery.

With the measures already causing disruption to planned building projects and threatening the future of the UK’s historic buildings, the BWF joined a number of organisations in opposing the change.  These include the Campaign to Protect Rural England, the Federation of Master Builders, the Heritage Alliance and the Royal Institute of British Architects.

BWF Chief Executive, Iain McIlwee commented on the government's plans;

“This this is blatant short-termism and is without doubt a further setback for our industry.  The outcome will be raft of work that will now never come to light or indeed corners will be cut to shave costs off.

"One wonders if this has more to do with being accused of another u-turn than sensible legislation. We are consulting with the wider lobby group, but I very much want to see the impact assessment for this decision and compare it to the 'pasty tax' u-turn, there is clearly a lack of consistency here."

The campaign against the changes did yield some concessions, in particular;
 

• The zero rating exemption has been extended to included owners who had applied for Listed Building Consent before 21st March this year.
• The deadline for completion of the work has been extended to 1st October 2015 to complete the work instead of 1st October this year.

Follow the link to find the document setting out the governments policy in its response to the consultation response (from page 22 onward). You can also view the BWF’s original consultation response letter to HMRC.