For more than twenty years listed places of worship across the UK have benefitted from being able to reclaim their VAT costs from repairing and maintaining their buildings. However, from 1 April all this will change with devastating consequences for historic churches. But why are the UK Government ending the Listed Places of Worship Grant Scheme now – and what did the Government’s own review of the scheme tell us about its success?
Delve into our analysis below and find out why a tax rebate is vital to keep these historic churches open and in use.
Bring me up to speed – what is the scheme and how did it work?
The Listed Places of Worship Grant Scheme operated as a grant reclaim scheme. Set up in 2001 by Chancellor Gordon Brown, it has been renewed by every UK Government since and has had cross-party support. Any listed place of worship – those recognised formally as having architectural or historic merit – could send in their invoices for repairs and maintenance and recover the full cost of VAT on the work. Since 2012, the budget the Department for Culture, Media and Sport (DCMS) had to manage the scheme was £42 million.
In March 2025, the Labour Government made significant changes to the scheme. A cap of £25,000 was introduced, meaning that for larger repairs – such as a new roof – the full cost of VAT could not be recovered, and churches had to raise money to cover VAT costs for the first time in two decades. The budget for the scheme was also almost halved – reduced to just £23 million.
However, the Government Review of the scheme only analyses records between April 2014 – March 2024 and the outcome of a survey carried out in March 2025 – before the cap came into effect.
Success of the scheme – what did the Government review find?
In this section, we will tell you the main points that the Government Review found under its six criteria for assessing the Scheme. Included in each section is our own summary and a comparison to the new Places of Worship Renewal Fund that has been announced as a replacement for the Scheme.
You can read the Government review in full here.
Reach
- In the last ten years, around 60 percent of the UK’s listed places of worship have benefitted from the scheme – around 12,600 buildings.
- While Christian places of worship received the highest number of grants over this time, smaller faith groups and non-Christian groups (including for repairs and maintenance at synagogues and mosques) have received some of the largest total amounts of grant per place of worship.
- The scheme reached all parts of the UK. But take-up of the scheme was strongest in England.
- In analysing the money awarded by the Scheme it was found that the majority of funding went to England (88%), with less in Scotland (6%), Wales/Cymru (4%) and Northern Ireland (2%). This could be down to England having more listed places of worship, but there was also clear evidence that participation was lower in the nations.
- 53 percent of those who did not use the scheme did not realise the scheme existed and a further 26 percent did not use it because the work was out of scope and not covered by the Scheme.
- Only five percent did not use the Scheme because they thought it was too difficult.
National Churches Trust summary:
The total number of listed places of worship that have benefitted from the Scheme is very high; it shows that it is reaching a large proportion of places of worship that it was designed to help. However, despite the scheme being established for many years, it still suffers from lack of awareness. It appears that, ironically, ending the Scheme has sadly brought more attention to it.
How will the Places of Worship Renewal Fund compare?
The Places of Worship Renewal Fund has two problems it must address. First, is the awareness issue. The Listed Places of Worship Grant Scheme ran for over 20 years, yet still many churches were in the dark about how it could help them. DCMS must work with Christian denominations and heritage organisations and run its own campaign to get the word out about new Fund. The other issue is that this new Fund is for England only. While the take-up of the Listed Places of Worship Grant Scheme was lower in the nations, it still provided a huge amount of support to buildings there, and there is no replacement at all, which is extremely disappointing.
Building condition
- 35 percent of respondents to the survey reported that their place of worship had deteriorated compared to 25 percent that thought their building was in better condition.
- Around 18 percent of respondents to the survey felt their place of worship was at risk of closing within five years due to difficulties in funding for maintenance and repairs. The figure for those who hadn’t used the scheme was higher, at 24 percent.
National Churches Trust Summary:
The data is similar to what we found out in our 2025 National Churches Survey, about the condition of places of worship in the UK, but also the uncertainty local churches had about their future. Funding for maintenance and repair work is a pressing issue; the UK Government must show leadership in this area and look at how we can preserve and protect these important buildings for the future.
How will the Places of Worship Renewal Fund help?
The news of a new capital funding scheme is good news. There are clearly listed places of worship in the UK that need support to be kept open and in use. Again however, this is a UK-wide issue, and the new fund will only apply to England. In ending the Listed Places of Worship Grant Scheme, it ends VAT relief for all listed places of worship in the UK. Having to raise an extra 20 percent on repairs is a huge burden for local people who look after these buildings – it is likely that without additional VAT relief – we could see many places of worship continue to deteriorate.
Works supported
- The Scheme most often supported works on the building that kept it windtight and waterproof.
- Alteration, adaptation and adding in new facilities, such as disabled access, toilets and kitchens, represented a small proportion of the funding overall, but these were individually costly.
- Where the works have supported alterations and adaptations, there was evidence of this increasing the sustainability of the building – with some social and economic benefits.
National Churches Trust summary:
The Scheme did what it needed to do – it kept places of worship in good repair so that they can be used for many different benefits. As a place of worship but also as a hub for the community and open for visitors and tourists too.
How will the Places of Worship Renewal Fund compare?
At present, the details are unclear on what the new fund will cover. We hope it will give grants not only for repairs but also the adaptations, alteration and the addition of facilities as the evidence points to this being crucial to help with the long-term sustainability of many churches.
Additionality, proportionality and appropriateness
- The Scheme was found to offer ‘additionality’ – securing benefits that would not have happened without the scheme.
- 11 percent of respondents to the survey shared they would not have been able to carry out the repairs without the Scheme.
- The grant was found to increase timeliness of repairs among half of all users of the Scheme by an average of 2.3 years.
- 31 percent of all users were able to carry out the work at a much higher standard, thanks to the Scheme.
National Churches Trust summary:
The timeliness of repairs is crucial. Delaying – even for one winter – can make simple repairs even costlier and more difficult to carry out. The work being carried out to a high standard – with the right materials and under a conservation accredited architect ensures that the repairs won’t need doing again any time soon and retains the integrity of the building. These are two brilliant outcomes of the Scheme that should not be ignored.
How will the Places of Worship Renewal Fund compare?
The budget for the Places of Worship Renewal Fund is much smaller than what the Listed Places of Worship Scheme has traditionally had. It works out at around £23 million a year for four years and will be subject to VAT costs. It is unclear if this will help listed places of worship to the same extent – due to the smaller budget and more targeted approach of the scheme, it is likely that this fund will only produce a good outcome for a smaller number of churches.
Processes
- Users were positive about the structure and administration of the scheme, praising the level of support available – via telephone and email – the application process and also the timeliness of the payout.
- Comparison with other grant schemes implied that there would be a trade-off between inclusivity of a scheme and targeting and prioritisation. More targeted approaches can increase the time and effort of applying for the grant and risks directing funds to a small number of beneficiaries.
National Churches Trust summary:
It is mostly volunteers with extraordinary time pressures and who are not always digitally literate who care for church buildings and apply for grants. A really understated benefit of the Listed Places of Worship Grant Scheme was how straightforward it was to use and how quickly the money was paid out. All listed places of worship needed to do is to submit their receipts online for repairs and maintenance that was carried out and the tax costs were refunded to them.
How will the Places of Worship Renewal Fund compare?
The new Fund is being set up as more of a traditional grant scheme, so people will need to apply for it. We are concerned that this grant application process will be burdensome for churches, many of which rely on volunteers and do not have paid staff who can fill out expressions of interest and funding applications. Through our Support Officers, who work on the ground in every UK nation, we know that many churches have been put off applying to grant funders, such as The National Lottery Fund, because of the long application process with no guarantee of success.
The new Places of Worship Renewal Fund is also likely to be targeted at specific places. In doing this, it narrows the number of buildings that will be able to be helped. One of the great virtues of the Scheme was that it was completely fair – any listed place of worship could apply, there was no additional criteria they were judged on.
Value for money
- Overall, the Scheme appears to offer good value for money.
- It effectively enables repairs to be carried out in a timelier manner and to a higher standard.
- Around £300 million was awarded in over 70,000 grants between 2014 and 2014.
- Costs of managing the Scheme were difficult to quantify but do not appear excessive compared with the social and economic benefits the works enabled.
National Churches Trust summary:
The review found out the Scheme offered “good value for money”. Our own research, The House of Good: Health, found that the community support – food banks, mental health support, parent and toddler groups – hosted and run by churches in the UK saved the NHS costs of £8.4 billion a year. The same as employing 230,000 full time nurses. Places of worship are providing a vital safety net for some of the most vulnerable people in the UK – but they cannot do this if their roof is leaking or tower crumbling.
How will the Places of Worship Renewal Fund compare?
It is unclear what running costs the new Fund will require. It will be managed by Historic England, which already receives Government funding. At this point, it is unclear if Historic England will also continue to award their regular grants alongside this new Fund.
What next for places of worship in the UK?
The Government Review of the Listed Places of Worship Grant Scheme has made clear how beneficial the scheme was for churches, chapels, meeting houses and cathedrals across the UK. It enabled repairs to be carried out to a higher standard and much quicker than if the scheme did not exist.
The Review also painted a stark picture of the scarcity of funding available for places of worship and how many churches were unsure if they would still be around in five years' time.
“The evidence shows that a capital funding scheme is sorely needed to keep the UK’s churches open and in use, but it also shows how incredibly important VAT reclaims were for the majority of churches,” says Ben Sims, Head of Policy and Public Affairs at the National Churches Trust.
“This should not be an either or. The Government should ensure that all listed places of worship across the UK can reclaim all VAT costs on repairs and maintenance of their buildings. This brings them in line with other heritage assets, such as museums.”
"The new Fund is also restricted to England only. The Department for Culture, Media and Sport must urgently work out how they can deliver support in Wales/Cymru, Scotland and Northern Ireland. It is unacceptable to replace a UK-wide grant with money for England alone.”
How you can help
Please consider writing to your MP about these changes – especially if they will impact your church, chapel, meeting house or cathedral. Many MPs and the wider public are unaware of the benefits of the Listed Places of Worship Grant Scheme.
At the National Churches Trust we will continue to speak up for places of worship in every nation, to help keep them open and in use. Thank you.
