Do you pay VAT on listed buildings?

Jul 25, 2023 | Business tax

Older properties can exist as protected landmarks of our historical past, but do you need to pay vat on these listed buildings? And how much?

Existing buildings are generally standard-rated (VAT is payable at the full rate of 20%). So all work to heritage and other existing buildings carries VAT at the highest standard rate of 20% unless you can find a way of paying a reduced or zero rate or of not having to pay VAT at all.

Let’s go into this in more detail.


Understanding VAT 

Value Added Tax (VAT) is a consumption tax levied on goods and services in the UK.

If you do own a listed building you need to understand how VAT affects your property, especially regarding maintenance, alteration, and renovation projects.

Listed buildings generally fall under the scope of VAT, and the standard VAT rate applies to most services related to their upkeep.

However, various schemes and exceptions may provide opportunities to minimise VAT liabilities.


Approved alterations: reducing VAT burdens

Property owners undertaking works that preserve the historical character of their listed buildings may qualify for a reduced VAT rate of 5% on eligible services. This can include things like double glazing or maintenance to the fabric of the building.

We’re familiar with approved alterations. Our team can assist you in identifying applicable alterations and help you make the most of this opportunity.


VAT benefits for Listed Places of Worship (LPWs)

For owners of listed buildings used as places of worship, there’s good news.

LPWs are entitled to a unique VAT scheme that allows them to reclaim VAT on eligible goods and services used for repairs and maintenance.

We can guide you through the process of maximising these VAT benefits, ensuring your place of worship remains well-maintained and financially sound.


Zero-rated VAT with grant-funded projects

Exploring grant-funded projects can lead to VAT benefits in the form of zero-rated VAT.

If your listed building receives funding through grants, certain aspects of your restoration project may be eligible for VAT exemption.

Our accounting experts are here to help you uncover these opportunities and manage your finances wisely.


Converting a historic building

Converting a listed building to a different use can introduce VAT implications that require careful consideration. Some are classed as protected buildings, so need more diligence to comply.

We understand the complexities involved and can advise you on VAT obligations during this transition.

With the guidance of an expert like us, you can confidently navigate the building works while staying compliant with VAT regulations.


We’re property experts

Tax regulations are always subject to change, and VAT laws are no exception.

Our accounting firm ensures that you receive accurate and current information, allowing you to make well-informed decisions for your listed property’s financial health.

We’re committed to providing expert financial guidance for owners of listed buildings in the UK. VAT regulations can be intricate to navigate, but with our experienced team by your side, you can approach these financial matters with confidence.

Whether you seek to benefit from approved alterations, explore VAT relief for LPWs, unlock zero-rated VAT for non-residential conversions through grants, or manage VAT implications during a change of use, our accounting services will ensure smooth financial management for your valuable heritage property.

Contact us today to discuss your listed building’s financial needs, and let’s work together to achieve financial success for your cherished heritage asset.

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