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Letter to Chancellor – VAT refund for Village Halls & Community Buildings
In 1984 the zero rate of VAT applied to building improvement works was removed. This has a significant and disproportionate impact on those involved in running community buildings and facilities. Constructing, refurbishing and extending community buildings may be significantly restricted by the requirement to raise additional funds to simply cover the cost of the VAT.
In effect, it means that the work of volunteers and charities is taxed, which makes their task of raising appropriate funding much harder and correspondingly more challenging in maintaining and sustaining facilities that meet the needs of the community.
Action with Communities in Rural England (ACRE) the national body for Rural Community Council’s in England has sent a letter to the Chancellor of the Exchequer Philip Hammond asking for appropriate changes to the VAT rate in light of these facts in time for the November budget.
It is worth noting that a similar letter has been sent to the Chancellor in advance of very budget since the zero VAT rate was removed. A wide range of benefits would stem from an exemption of village halls and community buildings from VAT or the provision of a grant to cover these additional costs. These are set out below:
Ten benefits of a VAT refund or grant scheme:
- Low cost to the exchequer but very significant benefit for affected communities, facilitating the “Shared Society” envisioned by Teresa May.
- Community halls employ local building firms. Enables work to begin on sites more quickly, supporting local jobs, economic benefits throughout the country.
- Improved buildings are better used, more financially self-sustaining and more likely to support further jobs e.g. caretaking, finance, pre-schools, fitness and wellbeing, language classes, catering, bars.
- Contributes to environmental sustainability: enables insulation, double-glazing and installation of renewable energy, compensates for the 2014 VAT rise on energy efficiency measures from 5 to 20%, renovation and improvement work becomes economically viable over rebuilding thus saving embedded energy in buildings.
- Contributes to maintenance of heritage assets: The asset base was valued in 2009 as over £3 billion. However, 60% of rural halls are more than 60 years old, many built or converted following the First World War as part of a national drive to improve conditions for the rural population. Maintenance and upkeep represents a growing challenge for volunteers relying on slender hire income from voluntary groups. 6% are listed buildings; similar proportions are War Memorials, 14% former village schools or schoolhouses, many situated in Conservation Areas or AONBs.
- Public funds would go further, helping more projects: Makes more efficient use of public sector, lottery, landfill and charitable grants as well as local fundraising.
- Delivers tangible social benefits: Enables communities to expand the traditional range of activities to accommodate services that improve health and wellbeing, reduce isolation and enable older people to stay fit and mentally agile, able to live in their own homes for longer, eg lunch clubs, libraries, post offices, community shops, food banks, clinics. Enables provision of indoor sports and recreation and variety of arts and cultural activities.
- Enables expansion of halls to enable DfE policy of increase in free pre-school hours to be delivered. In many rural areas other daytime use of the only community hall would otherwise prevent delivery, disadvantaging children and working families.
- Strong fit with the Localism and Community Asset Transfer agenda (DCMS), moves to achieve economies through outsourcing local government services and improving access to health and wellbeing services for an ageing population.
- Publicity has been given recently (Daily Telegraph 2nd January 2017, local radio, Meridian TV) to the difficulty of recruiting new, younger volunteers to run village halls. This difficulty threatens a “perfect storm” which could jeopardise the future of some halls when coupled with rises in significant items of expenditure: Insurance Premium Tax, Pension auto-enrolment, heating and loss of/bureaucracy accessing discretionary rate relief as rating authorities seek to raise income.