• Text size      
  • Send this article to a friend
  • Print this article

UK 'heritage tax' threat to historic Scottish buildings

SCOTLAND'S world-renowned stock of historic buildings is being put at risk by a "heritage tax" proposed by the UK Government, it has been claimed.

PROJECT: Under a 20% tax regime Edinburgh's Royal Commonwealth Pool project might have been shelved.
PROJECT: Under a 20% tax regime Edinburgh's Royal Commonwealth Pool project might have been shelved.

Conservationist groups have come together to oppose measures outlined by Chancellor George Osborne to remove VAT relief on changes to properties which are protected under the listed building status.

Under new plans, 20% VAT will be charged on alterations to a listed building, which will leave conversions of old and culturally valuable buildings requiring a far bigger outlay than in the past.

Properties which were previously renovated but would be taxed under the proposals include Aberdeen's 19th-century Marischal College building, Kelburn Castle in North Ayrshire, and Edinburgh's Royal Commonwealth Pool.

The National Trust for Scotland says the removal of tax relief outlined in the last Budget is ill-thought out and comparable to the fiasco over the much-derided "pasty tax".

The Scottish Government has joined widespread criticism of the proposal with Culture Secretary Fiona Hyslop claiming the tax will have economic consequences for the building trade.

Among those objecting to the changes are Archaeology Scotland, the Architectural Heritage Society for Scotland, the Institute for Archaeologists, the Royal Commission on the Ancient and Historic Monuments of Scotland and the Scottish Civic Trust.

Cliff Hague, chairman of the Built Environment Forum Scotland lobby group, said many smaller-scale projects could be hit hard. He added: "The current fiscal arrangements incentivise sympathetic alteration of these buildings to enable their long-term survival through continued use.

"This Budget proposal will impact most significantly on small charities and private individuals involved in taking on these buildings, not only for themselves but for the benefit of everyone, now and in the future.

"The financial viability of these special and often complex projects means that the current VAT relief can make the difference between a project stacking up or not."

Under the current scheme, VAT is charged on repairs and maintenance to listed properties but not on alterations, such as installing new windows or carving out modern housing or office space from a dilapidated but important historic building.

Scotland boasts thousands of such properties, ranging from castles and mansion houses to town halls, community centres, private homes and tenements.

A spokesman for the National Trust in Scotland said a special case should be made north of the Border because of the sheer number of buildings which will be affected by the change.

He said: "Although we are a charity and this does not apply to us, we have added our voice to the objections because the implications of this are potentially hugely damaging to Scotland's historic buildings. We do not think the Treasury have thought this through, in a similar manner to the knock-on effect we saw from the pasty tax."

"This will have more of an effect in Scotland where the harsher weather, higher rainfall and frequent frosts makes the cost of looking after historic buildings that much more expensive."

According to Scottish Government figures, the country's historic buildings contribute £2.3 billion to the economy each year, the majority from the specialist construction work.

Ms Hyslop said: "We remain disappointed with the approach of the UK Government and will continue to press the issue as we believe raising VAT on alterations to listed buildings, rather than lowering the rate charged on repairs, creates a disincentive on keeping them in use.

"Rather than impose greater costs, our approach should be to encourage demand for the traditional building skills. This approach would support the construction sector and stimulate economic growth."

A spokesman for the Treasury said the change was designed to address anomalies, and that it could not make repairs to listed properties VAT free as this goes against international law.

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis. If you're a relatively new user then your comments will be reviewed before publication and if we know you well then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules, which are available here.

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.