Newark Parish Church’s £4m restoration project to be hit with £600,000 funding hole following UK government changes to VAT rules

A major church restoration project is preparing to be hit with a funding gap of around £600,000 thanks to changes to tax rules.

At present, places of worship can fully claim back VAT on for repairs and restoration projects. However, the government has announced that from April, they will only be allowed to claim back up to £25,000. The ability to claim back any level of VAT will also come to an end in March 2026.

The changes will leave many high-cost projects with funding gaps, including the £4m restoration of Newark Parish Church, which is three months into a year-long work schedule.

The Reawakening of St Mary Magdelene project has received grant and National Lottery funding, and aims to make the 800-year-old listed building water tight by replace the leaky lead roof, refurbishing worn masonry, and boosting the building’s visitor appeal.

By removing the ability to claim back VAT the project will be hit with a £600,000 funding gap — despite being months into a project where contractor agreements have already been signed.

Church leaders are worried that this could impact upon the ability to complete the critical restoration works as they scramble to fill the hole.

Church warden, Andrew Fearn, said: “This has been sprung on us — the government changed the rules without warning.

“Six months ago we could have planned for it. In a year it wouldn’t be a problem. But at the moment we are mid-contract.

“We budgeted on the basis that we would be able to reclaim the VAT, and as you can imagine for a project like ours, in the millions, the VAT is huge.

“I’m in despair, because I think it’s really thoughtless and unnecessarily cruel.

“Quite easily the government could have inserted some transitional provisions which mean those churches, like ours, who are mid-contract are not caught out by these new rules.

“It is a severe set back and really disappointing because we had got off to a flying start.

“We have got our backs against the wall — I just have to hope that someone in the government sees sense.”

Mr Fearn said that the main restoration jobs, including replacing the roof, will be prioritised to ensure the building is water tight.

He has written to the MP for Newark Robert Jenrick and the secretary of state for media, tourism and creative industries Chris Bryant, as well as making an appearance on BBC Radio 4’s Sunday programme to help draw attention to the issue nationally.

The Bishop of Southwell and Nottingham, The Rght Rev Paul Williams, is also set to raise the issue at the House of Lords