Rachel Reeves comes after church roof repairs in newest stealth tax raid – sparking ‘outrage’ amongst worshippers
Some of Britain’s most historic and cherished churches may have to shut their doors after Rachel Reeves moved to hit them with her latest stealth tax, critics warned today.
The Government has confirmed it is to end the Listed Places of Worship grant, which has covered the VAT bill on major ecclesiastical repairs for two decades.
It is to be replaced in April with a new £92million pot for a four-year period. But campaigners say it is not clear if the new fund will cover VAT and, even if it does, will not cover the Church of England’s estimated £120million tax bill for maintenance over that time.
The pot is equal to the last year of the LPW scheme funding at £23 million per year for 2025/6. But that itself was cut from £42million in 2024/5, and does not rise with inflation, according to the National Churches Trust.
It pointed out on social media that demolishing a church would be tax free but congregations could have to pax tax for upkeep, making it cheaper to tear them down.
The Church owns half of the Grade I listed buildings in England, but despite sitting on an investment fund worth an estimated £11billion, local church upkeep is often financed by individual – and often shrinking – congregations.
British historian Robert Lyman was once of those who attacked the change, saying a ‘small number of parishioners’ looked after his local 1,000-year-old church and need to raise £70,000 for its refurbishment this year.
But he now fears they’ll need to raise an extra £14,000 for the taxman as they get ‘zero subsidy’ from the Church of England.
‘This is, frankly, an outrage. This shocking government should be ashamed of itself. I’m certainly ashamed of it,’ he said.
‘Outraged’ campaigners have warned this stealth tax will quicken the pace of church closures across the country
Sir Michael Fabricant, the former Tory MP for Lichfield in Staffordshire, said that this will be a ‘real burden’ on places like Lichfield Cathedral (pictured) ‘where stonework is constantly having to be repaired’
Sir Philip Rutnam, chairman of the National Churches Trust (NCT), said he was ‘very concerned’ about the ending of the grant scheme.
Sir Philip Rutnam, chairman of the National Churches Trust (NCT), said he was ‘very concerned’ about the ending of the grant scheme.
He told The Telegraph: ‘Museums and galleries offering free admission don’t have to pay VAT on repairs, but in future churches will. We call on the Government to end this unfairness and not to expect local volunteers to pay these extra taxes.’
Sir Michael Fabricant, the former Tory MP for Lichfield in Staffordshire, took to social media to voice his concerns, saying on X: ‘This will be a real burden on our ancient monuments where stonework is constantly having to be repaired like Lichfield Cathedral’.
Some churches have already descended into financial crisis after costs of major renovation works soared because of the change.
This happened at St Mary Magdalene Church in Newark-on-Trent which had £600,000 slapped onto the 900-year-old building’s leaky roof repair bill.
Around 3,500 churches have closed in the last 10 years, the NCT said, which predicted 2,000 more could shut in the next five years.
The Archbishop of York, Stephen Cottrell, urged the Listed Places of Worship grant to be kept last year, saying it had ‘been a lifeline’ to churches.
The Tories have vowed to restore the scheme and its funding to £43million a year.
The Listed Places of Worship grant had covered the VAT costs for church repairs for the last two decades but now will be scrapped
St Mary Magdalene Church in Newark-on-Trent which had £600,000 slapped onto its roof repair bill due to the change
The Department of Culture, Media and Sport (DCMS) said in December that £13,602,521 of the funding pot had been used as of December 23, 2025.
A spokesman said: ‘We have listened to historic places of worship. We heard loud and clear that many small churches struggled to afford the upfront costs of repair work under the previous VAT-rebate scheme.
‘Our new capital scheme better supports these churches by offering upfront funding for the vital repairs they need to keep serving their communities.’
