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Ludlow listed buildings will be hit by an expensive VAT 'timebomb'
LUDLOW faces being hit harder than anywhere else in the country by a stealth tax hidden away in Chancellor of the Exchequer George Osborne’s budget.
The tax time bomb is primed to go off in October when 20 per cent VAT will become chargeable on renovation and improvements to listed buildings.
Ludlow has nearly 500 listed buildings and Simon Buteax, chairman of Ludlow Civic Society, believes this is a higher proportion than anywhere else in the country.
The decision will also add an estimated £70,000 to the cost of renovating Bishops Castle Town Hall.
“It’s a very disappointing situation,”
said Simon Buteax.
He said that anyone taking on a listed building did so in the knowledge that the costs of repair and renovation would be high.
Up until the change announced in the budget renovation and improvement work was zero rated for VAT although it is chargeable on repairs.
Simon Buteax fears that the impact will be that some listed buildings will fall into disrepair and be lost.
He believes that people who may have considered purchasing a listed building and preserving it will now think again and go for the cheaper option of investing in a new build.
Simon Buteax warned that buildings would only have a future if their preservation enabled them to have a use and this often requires an element of improvement and renovation.
“Listed buildings will often need some renovation and improvement to make them suitable for modern use,” he said.
Work that will be affected by the new VAT regime includes the installation of toilets, kitchens and disabled access.
“The present system encourages people to change listed buildings instead of repairing them which, seems odd but this new regime in which VAT will be paid on both refurbishment and renovation is even worse.”
Sam Hine, director of the project to renovate Bishop’s Castle Town Hall has calculated that the change will leave volunteers needing to raise an additional £70,000 just to pay the extra VAT.
An option might be for them to register for VAT which would enable it to be reclaimed but this would require them to levy VAT and so add 20 per cent to their prices.
“People are just starting to realise the implications will impact upon listed buildings throughout south Shropshire,” she said.
Jonathan Wood, chairman of the Ludlow History Research Group, confirmed that the town has a large number of listed buildings and is consulting about the likely impact upon the town.
Another issue to be considered is the impact of the measure on the prospects for architects and construction firms specialising in the renovation of listed buildings.
He said he hopes the VAT will not deter people from doing work on listed buildings.
“A walk around the town suggests that I lot of work is being done and I hope that this continues.”