VAT now applies to listed buildings
Published: 30 April, 2012
LONDON: The brouhaha over VAT on pasties and hot takeaway snacks has overshadowed other VAT changes.
The Budget announced that the current VAT zero rating for building materials/construction services supplied in relation to approved alterations to listed residential or charitable use buildings, will be removed from 1 October this year.
In future, these kinds of alterations to listed buildings will be subject to VAT at the standard rate rather than being zero rated. This may, for example, make a material difference to educational institutions undertaking works to their college buildings; charity landowners; famers altering their listed farmhouses; or anyone else contemplating alterations to a listed building.
Many of the taxpayers likely to be affected by this change are unlikely to be able to recover much of the VAT which becomes chargeable as a result of the change, so it is likely that the real overall cost of alterations to listed buildings will, in many cases, increase.