As of October 1st 2012 the changes to listed buildings and VAT comes into effect.
Previously owners of listed thatched buildings, who applied for listed building planning consent (LBPC) and were granted it, would not pay VAT on the works although re-ridging and re-thatching work had always been subject to VAT.
The change means that ALL work to existing thatch properties is now subject to the current rate of 20% VAT.
As I understand it the exceptions are if contracts were already in place or if LBPC had been applied for before Budget day which was the 31st March 2012. The transitional period has now been extended to 30th September 2015 – i.e. where existing lengthy contracts have not been yet been completed.
Clearly this change will make some thatching more expensive. There are said to be 24,000 listed thatched properties within the UK and whilst most of these thatch owners would not apply for LBPC in the time they live in their properties, those – for example – that want to put in additional windows or change the type of thatch on their roofs may now have second thoughts about going ahead with the work.
The issue also becomes part of the wider debate about VAT within the construction industry and whether a much lower rate of VAT should be introduced within the sector to help kickstart the economy; something which I believe is long overdue.