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Organ Tax

Started by David Pinnegar, February 12, 2011, 09:21:30 PM

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David Pinnegar

The following letter appeared in The Times today:

QuoteTaxing fugues
Sir, Evidently the country's vast number of organ builders must be in great demand.

How else is one able to explain the decision, which came into effect (rather sneakily) on January 4, 2011, to disallow claims for the reund of VAT on payments for church organ repairs? Clearly this move is designed to arrest the flow of truly significant funds from the Exchequer.

There may, of course, be other explanations: the Government has no interest in the maintenance of historic artefacts, or perhaps its members wish to promote happy-clappy worship to the accompaniment of guitars. Or is this another example of the Government's being deluded rather than realistic?

Our Francis Booth Organ (1827) at Westgate Chapel, Wakefield, is currently being reinstated. It has taken us a long time to raise the finance fo this, and we have been hit hard by discovering that we cannot make any claim for the VAT refund even on the instalment we paid our organ builder before  the ruling was imposed.

KATE TAYLOR
Chair, Trustees of Westgate Chapel (Unitarian), Wakefield, W Yorks

As this ruling was made on 4th Junuary under the previous government and is yet another of Gordon Brown's sneaky policy of stealth taxation, this would be an appropriate tax decision for this government to reform.

However, there is here a comparison with the anti-conservation effect of VAT in the realm of Historic Building preservation - where repairs to historic buildings are subject to VAT but new works to historic buildings are zero rated.

Perhaps therefore it might be important to try to identify whether any work to the organ, which may be part of the schedule of the listed building, enables the work to the organ to be considered as "new work" rather than in any way merely repairs.

However, whether considering organs or buildings, this tax is not the way to enable the Big Society to ensure the preservation of the Heritage.

Best wishes

David P

Barry Williams

Unfortunately, the two issues are rather more complicated than the posting and letter indicate.

The informal refund, equivalent to the VAT paid on repairs on organs that were fixtures in a Listed Building used for divine worship, was withdrawn.  The logic was simple: a saving had to be made, so it was considered better to protect the envelope of the building rather than give relief to repair artefacts that might then suffer from the elements.

VAT relief by Zero Rating is a complex matter arising under VAT Notice 708.  There are detailed guidelines explaining the application of the relief to pipe organs in Listed (technically, 'Protected') Buildings.  It needs rather more than 'new work' to qualify for relief.  The alterations have to be to the fabric of the building.  Following a test case (not involving organs,) the fabric of the building was defined as being the floor, windows, doors, walls and roof.  There are wider circumstances under which work to organs may qualify, (providing that the organ is actually part of the building,) but they are quire rare and specific. 

Barry Williams