These concessions seem to encourage alterations, and potentially therefore, might cause erosion of architectural or historic character, but there are several points worth noting. Change requires listed building consent which can always be withheld, but, it is often possible to view this situation in a far more positive light. VAT relief can be used as a means to encourage the removal of previous alterations which now seem unsympathetic such as dormer additions, and, replacement windows and doors, which could, in turn be replaced in the original style and materials. Also, relief can only be obtained for works detailed on drawings, therefore the potential to obtain VAT relief can be used as a vehicle to secure a high standard of submission for listed building consent applications.
The system works on the basis that once listed building consent is obtained, the contractor is notified. He will then deduct VAT from his bill, thereby passing savings direct to the owner. The contractor will have to be VAT registered to achieve all this, which in some instances will be a means of guarding against the well known "cowboy". Ancient Monuments and Churches also enjoy concessions, although in the case of churches where relief can be obtained for alterations although consent may not have been necessary because of ecclesiastical excemption, the system does becomes unreasonable. In the case of ancient monuments, this status carries an implication that no change will occur, so relief on alterations does not carry any huge advantages.
Crucial to this whole situation is the fact that listed building consent is all about "character". A very difficult concept for a VAT man to grasp. Fundamental is the theme of "what you want to do" as opposed to "what you have to do". If you have to do something ie mend a hole in a roof, then there will probably be no relief, but, if something is being altered because you want to, and consent is required eg replacing tiles with slate or thatch, or a scheme of traditional decoration, then zero rating should, and indeed has been available.
Beyond all of this, there are several other points worth noting. Zero rating can also apply to the total cost of residential reconstructions or conversions where over 60% of the costs are in respect of new work. (The 60/40 rule). Also, DIY work on conversions to residential use or, work to residential buildings unoccupied since 1973 is eligible for zero rating.
Because a great deal of building restoration is undertaken by trusts the concessions available to charities, particularly where they are reconstructing a building for their own use be it business or non-business, should always be investigated. It is particularly important to be aware that a restorer can "opt to tax" which means that he can claim his VAT back as work progresses providing the liability is passed on to the purchasor, and of course, it is possible because of the existance of grants to sell the building at a figure well below the cost of reconstruction. For example, where work has cost £400,000 and the building is subsequently sold for £200,000 if the restorer has opted to tax VAT is due only on the purchase price -a saving of 50% of the potential VAT bill.
Most individuals ignore VAT thinking that because the system ignores repair and maintenance it is unfair and will change. But it won't and clearly, it is worthwhile for anyone to build up some knowledge of the subject, if applied with ingenuity and imagination, the system, even in its present form, can offer a great deal. For further information as well as advice, always consult the local VAT office. VAT men are usually extremely helpful.