Bell and Bell Rope VAT Reclaimable Again!
by Steve Coleman
Good news! As from this month, VAT is once again reclaimable on almost all work on bells, bell installations and bell ropes. It’s big money and it’s easy to get. So even if you hate finance and form filling, please don’t miss out.
All the same, since absolutely nothing about VAT is ever simple, here are the ifs and buts of it all.
The Basics of the Scheme
Put simply, the VAT, once paid, can be claimed from the Department for Culture, Media and Sport under the Listed Places of Worship Grant Scheme. It can’t be claimed from HMRC – or simply not charged by the contractor – because of EU rules. Full information and application forms can be found at www.lpwscheme.org.uk.
The First Requirement
And the first requirement is that your church is a listed building. That means it must be listed with English Heritage, CADW, Historic Scotland or the Northern Ireland Environment Agency. Most churches with bells are listed buildings but not absolutely all. Your churchwardens should know if yours is, but if they don’t, you can check with the particular listing authority that deals with your part of the UK. All the listing authorities but CADW can now be checked on-line.
The Second Requirement
The second requirement is that your church is – and I quote – a building where the sole or main use is as a place of public religious worship, and it holds at least six publicly advertised services a year.
Once again, the great majority of bell towers are in churches that easily meet these requirements because using part of the church for choir practices, church meetings, vestries, storage, socials, etc, don’t count against the sole or main use requirement. Only using some of the building as permanent residential accommodation – or as permanent commercial premises – causes a problem.
But see later if your church is redundant or your tower is detached.
What is Eligible
And here’s the best bit. Just about all significant bell-related expenditure incurred on or after 1 October 2013 is eligible. That’s expenditure on rehanging, augmentations, frame repairs, fittings repairs and replacements, quarter turning, new bells that replace old bells, new bells where there were none before, welding cracked bells, retuning bells for any reason at all, and bell ropes.
Don’t be misled about this. The current arrangements are significantly different to the old arrangements. VAT has changed too. Whatever you knew before is probably out of date now. I’ve checked with the Scheme Officers and they’ve confirmed that all the above expenditure is now eligible. Of course, things may change in the future, but that’s how they are at the moment.
If work in your own tower started before 1 October but wasn’t completed until after, only the appropriate proportion of the expenditure will be eligible no matter when the invoice is issued.
And architects, surveyors, engineers and bat inspectors fees incurred after 1 October, are eligible too.
A Registered Contractor
Be careful, though, because materials purchased for DIY work are NOT eligible. The materials MUST be supplied – and invoiced – as part of work being done by a VAT registered contractor. For most major work that will be no problem.
The only exception is bell ropes. The Scheme Officers have accepted that they need only be supplied by a VAT registered supplier. You can put them on.
Please note, though, that frame work has ALWAYS been eligible, so if you’ve had frame work done in the past year, you can claim now. And you can do that even though non-frame work is included on the invoice. There’s a widespread misconception about this.
And when it comes to paying, the PCC – NOT the “Tower Fund” – must contract and pay for any work or bell ropes. So if you have a “tower fund” that’s separate from the PCC and that normally buys the ropes, you won’t benefit. To get the VAT back, the fund must give the money to the PCC, and the PCC must then use it to buy the ropes.
The Time Limits
But watch out for the time limit. No claim can be made in respect of an invoice that’s more than a year old.
The Claim Limits
And when it comes to the claim limits, things can get really tricky, so I recommend a damp towel round the head when you discuss this with your church treasurer.
First, invoices for all sorts of work can be bundled together into one claim. So bell ropes, organ repairs and roof works can make up a single claim.
And it’s normally best if they do because no claim can be made for payments that total less than £500 before VAT. Worse, only one claim of between £500 and £1,000 can be made in any twelve month period.
And that means there’s a very real danger of your parish missing out on its maximum repayments if you and your church treasurer don’t think your past and projected expenditure through very carefully together before claiming.
BUT you can make as many claims as you like for bundles of invoices that total £1,000 or over.
And if you need to read those last four paragraphs several times, I fully understand.
And if that weren’t bad enough, the Scheme has an overall funding limit of £42 million per year for the duration of this parliament. And that £42 million includes the costs of administration.
To date, all eligible claims have been met in full, but the transitional arrangements in relation to the zero rating of certain church projects have almost certainly affected this. So as those transitional arrangements run out, the eligible claims may be only partially met.
So the moral is, put your claim in as soon as is sensibly possible.
Grants and Exemptions
And not surprisingly, you can’t get paid twice by the Government for the same outlay. So you can’t claim VAT back if it shouldn’t have been charged it in the first place, and you can’t claim it back if it’s already been covered by a government grant. That shouldn’t normally be a problem with regard to bell work, but it’s best to know.
If you look after a ring of bells in a redundant church, you can get the VAT back even though the church doesn’t hold six services a year as long as the church is owned by, or vested in, one of the appropriate organisations.
According to the strict Rules of the Scheme, detached bell towers are ineligible. However, following discussions, The Department for Culture Media and Sport has agreed that detached towers used only or primarily to house the church bells will be eligible under the scheme notwithstanding that six services aren’t held in them each year. This is a special exemption that doesn’t appear on the LPW Scheme website but which nonetheless exists.”
And lastly, you may well have to help out your church treasurer with all this. Many church treasurers only take on the job because no one else will, and their financial knowledge and expertise is necessarily limited. So don’t leave them to stew on their own. You probably now know so much about the Scheme, you can help them get back thousands of pounds of other VAT as well.
Yet More on Bell Ropes and VAT!
also by Steve Coleman
If you’d rather not be bothered with the next 7 paragraphs, here’s the speed-read summary: PCCs definitely CAN reclaim the VAT on bell ropes.
And I’m repeating that for the umpteenth time because a large number of PCCs believe they can’t. They’ve read the Rules of The Listed Places of Worship Grant Scheme saying that all materials must be incorporated into the structure by a VAT registered contractor, and they’ve realised that bell ropes generally aren’t because the ringers put them on instead.
Worse, just recently a couple of church treasurers phoned the Scheme operators to check, and were told that bell ropes are not an exception and that I’d got it wrong. So completely understandably, they wrote me letters severely ticking me off for misleading them.
So I’ve now been in discussion with the senior officers responsible for implementing the Scheme. They’re all very nice and kind people and they genuinely want to help everyone claim everything they’re entitled to. But civil servants get moved from one post to another, and the details of previous agreements aren’t always easy to find; and besides, bell ropes had been specifically excluded from the Scheme from 2010 until 1 October 2013, so the policy could have changed during that time anyway.
So, very helpfully, the lady in charge allowed me to start at the beginning again and go through in detail all the particular reasons why bell ropes, alone, should be treated as a special case – though I won’t bore you by going through all those reasons again here. She and her ministerial colleagues then held detailed and sympathetic discussions between themselves, and decided that, yes, bell ropes are eligible.
But they are absolutely clear that this exception applies only to bell ropes, and the other Rules of the Scheme haven’t altered in any way. Nothing in this decision is a precedent for other expenditure in any way whatsoever.
The Other Rules
And just to recap for the sake of complete clarity, you can reclaim the VAT on bell ropes from The Listed Places of Worship Grant Scheme as long as:
- Your church is a listed building;
- It holds regular services;
- The PCC pays for the ropes – not the “Tower Fund”.
- You claim within 12 months;
- Your total claim – including other eligible items possibly – is in respect of at least £500 of pre-VAT expenditure.
There are full details of all this in my article on Page 1032 of the Ringing World of 11 October 2013, but if it all makes your head spin and you’d like to chat about it, just email or ring me and I’ll be pleased to help.
Steve is happy to answer all other Ringing and Money questions. His email is email@example.com