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Chancellor urged to issue Budget VAT refund to village hall charities

Issued 8 March 2017

ACTion with communities in Cumbria is urging the Government to pledge £3 million in the Budget to refund the VAT paid by village halls on improvement work such as modern kitchen and toilet facilities and new meeting rooms. 

The cost of VAT on improvements hampers fundraising to improve these vital community buildings. Lorrainne Smyth, ACT CEO said: "We have written to our Cumbrian MP’s on this and both Sue Hayman and Tim Farron have written to the Treasury to support this proposal. In Cumbria at least 30 halls a year are undertaking significant upgrading work, as well as two or three who are carrying out total rebuilds."

ACT is one of the thirty eight members of the national Action with Communities in Rural England Network. The ACRE Chairman, David Emerson CBE, has also written to the Chancellor on behalf of ACRE’s Village and Community Halls Network to ask for VAT refunds for village halls and other similar charitable community buildings such as church halls, community centres and scout huts, all of which provide essential facilities for a wide range of community groups such as pre-schools, youth clubs, WIs, lunch clubs for the elderly and sports groups.

 Mr Emerson says “A closely targeted VAT refund scheme would assist volunteers running charitable village halls and similar community buildings to update and adapt older buildings to better serve their communities in the light of changes in society, such as an ageing population and increased pre-school hours. 

"A VAT refund scheme would achieve immediate social and economic benefits without having to wait for a review of VAT rates post Brexit.  It would demonstrate that the Government intends Brexit to achieve benefits right to the grassroots of communities throughout the UK”

Small village hall charities are not VAT registered so they cannot reclaim the 20% VAT on building work to update older halls, which means that a £200,000 refurbishment project incurs an extra £40,000 in non-reclaimable VAT.  This tax on voluntary effort is widely felt to be unfair. Charitable community buildings underpin community life, particularly in rural areas where alternative facilities such as pubs, shops and schools have closed.

VAT refund schemes now operate for search and rescue services, hospices and historic churches which pave the way for a modest refund scheme for village hall.

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