Making Sense of VAT and Listed Buildings

The recent budget turned the Heritage industry on it's head, by removing the zero rating for VAT on approved changes to Listed Buildings.  So... if you apply for Consent now, you WILL be subject to 20% VAT.  I summarise the old regulations below, because they still apply to work being undertaken on contracts which are current, started before the new regulations came in last year, and are due to finish sometime this year (2013).  So... read on if you are currently working on a project, if not, assume you will pay the full rate of 20%.

 

The most important thing to understand about VAT and Listed Buildings WAS quite simple:

An Approved Change

If any work is done to the building, it must be seen as a clearly defined change to the specification, and it must be approved.  In other words, it has to be included in documentation from your local planning authority, in writing, and approved by the Conservation Officer.  HMRC uses words like 'more than trifling or insignificant', and 'must be part of the fabric of the building'.  This means that you won't be able to landscape the place at zero vat - which is hugely annoying, when you consider that terraces and stone steps, walls and so on form part of the curtilage of the building and will certainly fall under the control of Building Conservation.

Anything that is NOT an approved change will be VAT rated at the normal level - usually 20% these days.

I've included the entire ruling by the VAT office on another page here - but examples that we come across a lot include:

Replacing a roof:  If we just take it off, and re-felt and batten the roof, then its classed as repairs.  If we CHANGE the roof, by removing the lath, and introducing insulation, then adding counterbattens, over which is another layer of membrane and lath - then we have changed the physical structure of the roof.  So long as this is approved by Conservation, and they are happy that the roof sits higher on the building because of the change, it would be zero rated.

Replacing Windows:  If we take out rotted Georgian sash windows and repair them, putting them back again with nice new paint finishes, and new sash cords - they are repairs and attract 20% VAT. If we take out horrible PVC plastic windows and replace them with Georgian Style wooden sash windows in a design approved by Conservation, then its zero rated - an approved change.

Removing Cement Render:  If we remove cement render, and then replace it with 3 coat lime render over fibreglass mesh, its zero rated - its an approved change.  If we just re-rendered in cement (which I would refuse to do anyway) then it 20%.