Hundreds of historic churches across England and Wales face being lost forever due to a planned VAT change branded a 'stealth tax' by campaigners. Chancellor Rachel Reeves has announced that from April, churches will lose their exemption from paying VAT on repair work, a move that could push many already struggling buildings into irreversible disrepair.
The End of a Vital Tax Break
Upon entering the Treasury in 2024, Chancellor Reeves reversed a previous Conservative policy that allowed churches to offset all VAT on repair bills. She initially capped this allowance at £25,000 per year. Her latest decision removes the tax break in its entirety, meaning religious buildings will have to find an extra 20% for all restoration costs.
The move has drawn fierce criticism, with the National Churches Trust leading a campaign to save the almost 1,000 churches, chapels, and cathedrals it says are in urgent need of repairs. The Trust argues that these buildings provide an estimated £55 billion in annual 'social benefit' to the UK. Treasury calculations reportedly suggest that for every £1 invested in churches, over £16 is returned to local communities.
Churches in Crisis: From Devon to Glamorgan
The real-world impact of the policy shift is already being felt. The 500-year-old St Mary's church in Totnes, Devon, which boasts an ancient stained-glass window and a 19th-century organ, is at risk of collapse. Locals raised £1.4 million over 15 years for urgent repairs, but the change to the VAT scheme has left them with a crippling £130,000 shortfall.
"This was a big knock for us," said Father Jim Barlow, Rector at St Mary’s. "Given that we have already been supported by nearly all the major funders for church heritage projects, it has been a real struggle to find these extra funds."
In Wales, one of Britain's oldest places of Christian worship, St Illtud's Church in Llantwit Major, Glamorgan, faces a similar crisis. Dating back to 500AD, the building now has water coming through its roof and walls, damaging its ancient fabric. Buckets are placed in the aisles to catch drips. Repairs are estimated at £500,000, but without the government scheme, the church may need an additional £100,000, leaving its future "in limbo."
Political Outcry and Calls for a U-Turn
Sir Philip Rutnam, Chair of the National Churches Trust, stated: "These statistics should be an alarm bell for the Government – now is the moment to act to save these important buildings before they fall even more into disrepair. Once these buildings are gone, they are gone forever. There is no second chance to rescue them."
The controversy is heightened by the revelation that St Mary’s Somers Town, in Prime Minister Keir Starmer's constituency, recently received £639,000 in government funds for its repairs. Tory MP Saqib Bhatti has called on the PM to reverse the 'church tax', saying: "The Christmas period is an important reminder of the role churches play in our communities... I once more call on the Prime Minister to do the right thing and reverse this despicable church tax."
A government spokesperson for the Department for Digital, Culture, Media and Sport (DCMS) defended the value of listed places of worship, calling them "vital community hubs" and buildings of "exceptional architectural and historical significance." However, they did not comment on the specific policy change.
