Paymaster General Dawn Primarolo claimed in the Commons that EuropeanCommunity VAT rules bar the Government from conceding a 5% rate on churchrepairs and renovations.
The demand was voiced by Second Church Estates Commissioner Stuart Bell,Labour MP for Middlesbrough, who argued strongly that ministers shouldseek to extend a draft European Directive permitting a lower rate of VATon labour-intensive home repairs to the artistic heritage as well.
Bell, the designated MP to reply to MPs' questions about the Church ofEngland, complained: 'The millennium will end as it began with the Churchrendering unto Caesar - that is, the state - that which belongs toCaesar, although at severely damaging VAT rates and under an unreformedVAT system.'
Bell said Government decisions to switch from direct to indirecttaxation had added VAT the cost of Church repairs, while reducingcovenant income - while tax has been extended to cover church halls,heating and bells, and insurance tax.
He said the tax burden on the voluntary sector has risen £460 million in20 years.
He said the General Synod had already called for a harmonised 5% lowerrate of VAT on all building work.
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