Ringing and Money
5. VAT and Bell Ropes
One of a series of articles on Ringing and Money by Steve Coleman
VAT is an absolute scandal! Why should churches pay it when they’re charities anyway? Why is it so complicated to work out whether it’s due on something or not? Why when we’ve just bought a set of ropes for £1,000, should we have to pay VAT on top? How can we avoid paying it?
How splendid to receive a letter with no full stops in! And how concise to have got so many complex questions into one paragraph! But getting back to ordinary punctuation and answering only your main question, in essence you don’t have to pay VAT on bell ropes, and here’s why not.
So to start with, as I’m sure you know, the general position is that charities – including churches – have to pay VAT in just the same way that individuals and businesses do. As with all taxes, there are all sorts of ifs and buts to that – particularly as regards major works, and we’ll talk about those another time – but that’s the general position. So if your church buys a set of bell ropes because the old ones have worn out, the supplier – assuming he’s registered for VAT – will add VAT on as he’s required by law to do. Indeed, if he didn’t, he’d get into a lot of trouble.
Listed Places of Worship
But fortunately, that isn’t the end of it. The Government would rather VAT wasn’t chargeable on the costs of maintaining churches and other places of worship, but under EU regulations they’re unable to opt out of the Europe-wide system. They’ve been arguing for an EU change for some time, and they may yet succeed, but meanwhile they’ve found a way round it.
So back in 2001 the Chancellor introduced a scheme whereby most of the VAT on certain repair and maintenance expenditure incurred by a Listed Place of Worship could be reclaimed by way of a grant from the Department of Culture Media and Sport. The grants were non-discretionary, so if you were entitled, you were entitled and that was that. But I say, "certain expenditure" because it included all sorts of things like "rainwater goods repairs" and "wall paintings/murals" but not bells or bell ropes.
The Important Date
Then in 2004 the Chancellor extended the scheme to repay the whole of the VAT on eligible items, and in 2006 he extended it even further to include bells and bell ropes. The start date for these ringing-friendly grants was 22 March 2006, so giving the following important fact a paragraph all to itself:
Grants are available for replacement bell ropes invoiced on or after 22nd March, 2006.
And in case you’re wondering, the VAT on a great many other items of church repair and maintenance expenditure is effectively reclaimable too. If you want a – more or less – complete list of eligible expenditure, you can find one at www.lpwscheme.org.uk/msg6.htm, and if you want to be sure about a particular item, you can ring the Listed Places of Worship Grant Scheme on 0845 601 5945.
Ifs and Buts
As with all schemes there are some ifs and buts, but fortunately, there aren’t many. With a few exceptions, the church must be a normal one, registered as a charity, supported by the congregation and open for public worship. It must also be a listed building with English Heritage, CADW, Historic Scotland or The Northern Ireland Environment and Heritage Service. The great bulk of churches in the United Kingdom with rings of bells, pass these tests without difficulty.
Importantly, though, the scheme covers repairs and maintenance rather than new work, so a replacement bell rope classes as a repair – as does the welding of a bell or the recasting of a bell – but an extra bell in an old frame doesn’t.
With Major Work
That said, the whole business of VAT on rehangs and augmentations is both complicated and bizarre, and we can talk about it all another time. But since the bellhangers are completely up to speed on this, they will give you full details if you’re planning major work. Nevertheless, since we’re on the particular subject of bell ropes, I’ll just mention here that new bell ropes supplied as part of a rehang or augmentation in an entirely new frame, aren’t subject to VAT anyway.
The Claim Limit
But getting back to replacement bell ropes, one thing is tricky. Claims can only be made where the total expenditure on the claim before VAT is £1,000 or more. Fortunately, though, it isn’t all that tricky because a number of items can be bundled together in one claim. So you can arrange for your church treasurer to claim for £500 of bell ropes along with £200 for a new gutter and £350 for organ repairs.
And fortunately there is no time limit by which claims must be submitted – or, at least, not until 2011 at the earliest. So if you and your PCC treasurer are learning about this for the first time, you can still get the documents together and make a claim for all your qualifying expenditure since the scheme began.
The forms and guidance are simple enough and you can find them on line at www.lpwscheme.org.uk. Any ringing bureaucrat will find them child’s play compared to most grant applications. But – and this is a very big but – you can’t get the VAT back if you’ve got a "Tower Fund" and buy the ropes out of that. The Tower Fund must give the money to the church, and the church must buy the ropes.
It’s yet another disadvantage of having a Tower Fund. And that is what we shall be looking at next time.