VAT refund campaign for community buildings
Most projects to refurbish, extend or otherwise improve community halls and centres get charged VAT at the standard 20% rate. So your kitchen refurbishment costing £25,000 will require you to fundraise for another £5,000; your major extension costing £100,000 will leave you with a VAT bill of £20,000.
What if there was a refund scheme to help you meet at least some of these costs? Grant schemes to give VAT refunds already exist for search and rescue services, hospices, and historic churches. ACRE estimates that just £3 million would be needed for the first year of a national pilot scheme to help small community buildings (which struggle to deal with the bureaucratic burden of VAT registration) meet the cost of VAT on improvement works.
ACRE has put together a proposal with details of how such a VAT refund scheme would benefit community halls. Please take a look at their proposal (see below) and use it to lobby your MP about this important issue. You could also join the National Village and Community Halls Network (at no cost) and add your experiences to the national picture.
I would particularly like to hear from you if you have recently had to pay a significant VAT bill on some building work. How much longer did the fundraising take; what other improvements you could have made if you didn’t have to pay the VAT? Call me, Kevin Sawers, on 01962 857358 or email me.
Currently, reducing or removing VAT on improvements to community buildings is not possible under European legislation. As ACRE say, while Brexit provides the opportunity for the UK to re-instate zero-rate VAT on improvement work for village halls, that will need to be considered as part of the Treasury review of post Brexit VAT rates. It is not guaranteed and will take time to achieve.
The ACRE paper notes the potential for future reduction of the VAT rate, while acknowledging that any such action and lobbying to that effect should be taken as longer-term goals.