Alterations altered
One of the VAT changes announced in the March Budget was the ending of VAT relief for approved alterations to listed buildings from 1 October 2012. The Chancellor rightly said that the rules have been peculiar – VAT has been charged on repairing listed buildings, but not charged on altering them. As we can’t extend the VAT relief to repairs – Europe won’t let us – surely we should remove the incentive to make changes?
There was a huge protest that the VAT relief helps preserve old buildings by allowing them to be given a new use – otherwise they might be left to decay. After backing down on pasties, Mr Osborne stuck to his policy here.
However, there was an even stronger argument that changing the rules so quickly was unfair – people who had been working their way through the planning system and scraping together the money for a big project would have to get the whole thing finished by 30 September 2012 or find all their sums were thrown out by 20%. The rules have been softened so that projects where planning permission had been applied for before 21 March 2012, which are completed by 30 September 2015, will still get the old relief. But if the consent hadn’t been applied for by Budget day, it’s back to the drawing board.