Ringing and Money
Important VAT changes 2025 -26
By Steve Coleman
By kind permission of The Editor of The Ringing World where the article was first published.
First, the good news. The Listed Places of Worship Grant Scheme has been extended into the financial year 2025/26 – i.e. until the end of March 2026. All the existing rules for qualifying expenditure will continue to apply, so if you've forgotten them, I set them out in detail in 2023 on page 660 of The Ringing World. Essentially, subject to a few wrinkles you can recover the VAT on almost all significant bell work, ropes and muffles.
The new scheme cap
The not-so-good news concerns the Scheme cap. Currently, the total cost of the Scheme – including administration – is capped at £42 million per year, and although to date that hasn't been a problem, that can only be because many PCC treasurers aren't aware of the Scheme's existence.
From next April, though, that annual cap will be reduced to £23 million, so at first sight that looks as though it might be a problem.
The new building cap
But fortunately for ringing it probably won't be because a new and different cap will be introduced as well. It will be a building cap, so in 2025/26 the total amount that any one building – that's any one church – will be able to receive will be capped at £25,000.
And that looks as though it will be good for us because fewer than 6% of all current claims are over £25,000 yet some of those 6% are very large indeed. So since ringing claims are normally less than £25,000, they'll benefit from the very large non-ringing claims being excluded.
If yours won't be
I stress, though, that this is a building cap not a project cap, so if you're in charge of a rehang you'll need to consult closely with the PCC treasurer about other eligible church work being undertaken or about to be undertaken. If all the combined ringing and non-ringing costs in 25/26 will exceed £125,000 before VAT, you'll have some serious thinking to do, and the same applies if your rehang costs alone will exceed £125,000.
And that serious thinking will involve planning your payments. As I explained in 2023, you can submit a claim for any work where your PCC has paid an eligible invoice – or a bundle of eligible invoices – totalling £1,000 or more before VAT. Also, your suppliers can issue interim invoices for stage payments.
So putting it strongly and bluntly: you do not need to delay invoices and payment until the end of a project.
And I've given that a paragraph of bold italicised type all to itself because for some churches and some projects it will be very important indeed, yet many PCC treasurers insist on paying as late as possible.
But if you're expecting bills of over £125,000 before VAT, and you can submit a partial claim before the end of this March, you could save a substantial sum.
Suppose, though, you anticipate that all the work will cost over £125,000, but it will be both started and finished in 25/26: what then?
You might think about asking your suppliers to issue interim invoices in 25/26 but delay the final invoices until after March 2026. You can't, though, because that would be fraud. But if some of the work were delayed and so not completed until April 2026, the final invoices would legitimately be issued in 26/27.
Of course we can't yet be sure that the Scheme will continue into 26/27. But it probably will; and even if it doesn't, as long as you've made the maximum claims in 25/26 you'll be no worse off.
All very complicated, but of course, VAT issues often are.