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VAT change could 'torpedo' community right to bid

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A government proposal to charge VAT on alterations to listed buildings could be a “fiscal torpedo” to one of the key parts of the Localism Act, the charity leaders’ group Acevo has warned.

The localism Act introduces a “community right to bid”, under which parish councils and community groups can bid to buy and take over the running of buildings that are deemed to be “assets of community value.” This can include local pubs and community centres.

But in a letter to communities secretary Eric Pickles, Sir Stephen Bubb, chief executive of Acevo, has warned that a plan announced in the Budget last month to remove the zero rating for alterations to listed buildings could undermine the measure.

“I worry that the change could constitute a fiscal torpedo to the government’s Right to Bid scheme,” the letter says. “A significant proportion of all transfers of public sector assets to community groups involve listed buildings, and in many cases the asset transfer will involve (and be predicated on) some kind of alteration.”

A spokeswoman for the Treasury said it was considering the letter and would respond “in due course.”

A HM Revenue & Customs consultation that covers the issue is open until 18 May.

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