Church Links

Churches and VAT » Notes on VAT

Possible areas for VAT savings

Advertising and goods associated with donations

Your Church can advertise VAT-free in any medium that communicates with the public, such as a newspaper or television, providing the advert is placed on someone else’s time or space. This means that if someone charges your Church for an advert, for example in their magazine or on a radio programme or for displaying a poster on their premises, they don’t have to charge you VAT.

This provision applies to adverts used for fund-raising purposes, publicising the objectives and activities of the Church or courses which the Church provides. This should mean that advertising Alpha courses is zero rated, but should also mean that advertising services, for example at Christmas are also zero-rated.

The provision also applies to preparation of artwork etc for printed media adverts in leaflets or newspapers. However, zero-rating for TV and radio advertising only applies to broadcasting costs.

Find out more in VAT Notice 701/58 available from HMRC.

Equipment for producing talking books and newspapers

If your Church cares for the blind and the severely visually impaired, you can obtain zero rating for purchases of sound recording and reproduction equipment that has been designed or specially adapted for recording or reproducing speech.

In the case of reproduction equipment, zero rating will not apply where the equipment is available for use by anyone other than the blind or severely visually impaired.

The zero rating also covers radios and cassette recorders purchased for free loan to the blind, and the repair or maintenance of any of this equipment.

The supply of cassette tapes is standard-rated.

For more information see paragraph 6.1.6 of VAT Notice 701/1 Charities available from HMRC.

Building Work

Construction of buildings

The construction of buildings and certain works to protected buildings, intended to be used by your Church solely for non-business purposes or as a village hall or similar, can be zero-rated subject to certain criteria being met. A reputable builder, should be able to tell you which items this applies to.

Your Church may also benefit from zero-rating for the construction of a ramp or widening of a doorway or passage to enable disabled people to gain access, or move about in, your Church building, or for providing, extending or adapting a washroom or toilet for disabled people.

Find out more about the VAT relief on construction of facilities for disabled people in Section 6 of VAT Notice 701/7 and you can find out more about zero rating of building works in VAT Notice 708 Buildings and construction available from HMRC.

Maintenance of Listed Buildings

If your Church is a listed building you will be able to claim back the VAT element of your building costs and since April 2006 the VAT element of your architect’s fees can also be reclaimed.

This can be done through the Listed Places of Worship Grant Scheme. For more information visit their web site at http://www.lpwscheme.org.uk.

Installation of energy-saving materials in buildings

The installation of energy-saving materials, such as central heating and insulation in residential accommodation or in a building used solely for a relevant charitable purpose is liable to VAT at the reduced rate.

You can find out more in VAT Notice 708/6 ‘Energy-saving materials’ available from HMRC.

Fuel and power

Your Church has to pay VAT on supplies of fuel and power. However as a Church with Charitable status, you can claim the reduced rate of 5 per cent. Contact your Supplier to implement this.

Find out more in VAT Notice 701/19 Fuel and Power available from HMRC.