The Church of England is pressing the Labour government to secure long-term funding for a major tax relief program, cautioning that hundreds of historic churches could deteriorate or close if the policy is allowed to lapse.
The Listed Places of Worship Grant Scheme—created to reimburse churches, mosques, and synagogues for value-added tax (VAT) paid on building repairs—is scheduled to end in March 2026 unless renewed.
In January, Culture Secretary Lisa Nandy extended the policy by only one year, reduced the annual budget from £42 million ($55 million) to £23 million ($30 million), and introduced a £25,000 ($32,600) cap on individual claims.
The Church of England, which oversees nearly half of the United Kingdom’s Grade I listed buildings, maintains that the grant is indispensable to keeping many historic religious structures safe, open, and functional.
According to The Telegraph, church officials say the changes—combined with the uncertainty surrounding long-term funding—have already halted critical repair projects across the country and made planning nearly impossible.
Archbishop of York Stephen Cottrell appealed directly to Chancellor Rachel Reeves, describing the program as a modest but vital investment in national heritage. “For more than 20 years, [churches] have relied on the Listed Places of Worship Grant Scheme to give that crucial bit of extra help,” he said. “We urge the government to make the scheme permanent and lift the cap on claims.”
Cottrell also warned that ending the scheme would severely impact churches’ community services, including winter warm spaces, food programs, and support shelters.
The Rev. Marcus Walker, rector of St. Bartholomew The Great in London, argued that the government benefits from voluntary church fundraising and should not impose additional tax burdens on historic places of worship.
To date, ministers have not clarified whether the scheme will continue after March 2026. The Treasury has stated that future tax policy decisions are announced only during fiscal events.
The Department for Culture, Media and Sport has defended the value of the current program but stopped short of committing to an extension, noting that other funding avenues—such as the National Lottery Heritage Fund—remain available.
In July, the House of Commons Culture, Media and Sport Committee also recommended that the government make the scheme permanent.
Church Times previously reported that the program has served as a “lifeline” since its introduction in 2001, quoting the archbishop of York as saying that only 27% of churches might remain open in five years if current policy trends continue.
Church House figures show that more than 100 Anglican churches and cathedrals are undertaking repairs exceeding the £25,000 claims cap. Of those, at least 38 projects are valued at over £2 million ($2.6 million), and 41 are multi-year restorations dependent on stable long-term funding.
