Legal Requirements: Listed Buildings
An owner has legal responsibilities, irrespective of whether the house and buildings are modernised. Looking after a building of a historic nature must go well beyond normal maintenance. Some buildings are so special that the public interest is affected and protection of such buildings is currently provided under the Planning (Listed Building and Conservation Areas) Act 1990 (A Heritage Protection Bill was deferred in 2009 but the general policy in respect of conservation which had been set out by Policy Guidance Note15 is now superceded by Planning Policy Statement 5 under which Listed Buildings are now termed as "Designated Heritage Assets". This new policy document now provides alternative guidance to Local Authority Conservation Officers, and any Listed Building application now requires submission of a "Statement of Significance" before a Listed Building application is considered.
Owners of Listed Buildings are therefore encouraged to seek expert advice on whether any proposed works require Listed Building Consent, and on the best way to carry out any such works to their property whilst giving consideration to the significance of the heritage asset, its contribution to its setting and likely impact of alterations or additions on such significance. Ultimately, a Heritage Asset is a shared resource and therefore needs to be considered by reference to the significance of the Asset to the wider public. Understanding the significance of the history of the building, the archaeology, the aesthetics and its meaning to the community is essential. It should be possible to obtain such expert advice from a Specialist via the Local Planning Authority, English Heritage, or indeed, ourselves.
Initially, the owner is encouraged to undertake a detailed record of all buildings and plant etc prior to any alteration, demolition or extension, which affect its character, its structure or fabric, even though these works may not need Planning Permission. This therefore also includes where interior work of significance will be lost, affected by sub-division or substantially rebuilt.
It is a criminal offence to demolish or alter the character of a Listed Building without Listed Building Consent. Equally, under S54 of the Planning (Listed Buildings and Conservation Areas) Act 1990, the owner can be required to carry out works as considered urgently necessary for the preservation of the buildings on site. If he fails to carry out such work, the Authority may undertake the work, with costs recoverable from the owner. (Subject to conditions). The intention of the legislation, however, is not necessarily to prevent change but rather to control it so as to maintain the essential character for which the building was Listed.
There is a popular misconception that only the exterior of the building is Listed; this is not the case, as the whole building is legally protected. Protection is given even to small items and details which can make an important contribution to the architectural and historic character of the building. This can also include outbuildings within the curtilage.
Listed Building Consent will therefore be required for the following works:
- Any alteration to the fabric to alter/incorporate Services
- Any alteration to the character of the building or its setting. This includes works within the boundaries of the property, such as a Garage or other building regarded as lying within the curtilage of the property; or alteration to internal or external features, such as window frames, drains etc
- Introduction of fittings
- Demolition or Reconstruction of any element of the building, including temporary removal. There is a general presumption against demolition
In addition, any alterations to Services may require compliance with Building Regulations; Building Regulation approval will be required, in addition to Listed Building Consent for any material alterations, such as underpinning; and Fire Regulations/Fire Certificate may be required in respect of any accommodation at second floor level.
It is therefore important for an owner to consult the Local Authority Conservation Officer or English Heritage at an early stage to ensure that historic fabric is not inadvertently lost. Advice notes are available from the Local Authority, and we advise you to familiarise yourself with these before committing yourself to purchase.
VAT: Under certain circumstances, 'approved alterations' to a protected building for which Listed Building Consent is obtained, can be zero-rated for VAT. You are recommended to consult with Customs & Excise, prior to commencement of any work to verify whether the intended works can be zero-rated. However, during the Budget 2012, the Chancellor announced the following Rules relating to VAT:
Supplies of building materials or construction services made on or after 1 October 2012 will be subject to VAT at the standard VAT of 20%.
Under transitional relief, if a signed contract was in place before Budget day the supplies of building materials and construction services under that contract can continue to be charged at the zero rate until 20 March 2013. Any work performed after that date will be standard rated. Contracts entered into on or after March 21 2012 will have the level of work completed up to the 1st October 2012 charged at zero rate with the remainder after this point charged at the standard rate of 20%. A fair apportionment must be made of the work done before and after the change. If a pre-payment is made or building materials delivered before 1st October 2012 but the construction services are performed (or the materials incorporated in the building) on or after 1 October 2012 there will be an anti-forestalling charge applied at the standard rate of VAT which becomes due on 1 October 2012. For construction services the charge will apply to the proportion of such services performed on or after 1 October 2012. For goods, the charge will apply to the extent that they are incorporated into the building on or after 1 October 2012. Any projects completed by 1 October 2012 can be zero rated.
Comment: The determination on the VAT rating always fell to a decision by HMRC. A common approach to reduce the risk of a VAT rate being applied after construction work had been completed and paid for, owners, agents and contractors would seek the relative safety of a Planning Application and Listed Building Approval to meet the criteria of Approved Alteration. This often resulted in applications being made to the Local Authority for alteration works to ensure that the VAT rate was zero. The zero rating was often extended to repairs as approval would be sought to cover the repair as an alteration. With no incentive for a reduction in VAT liability will this result in fewer applications to the Local Authority and therefore a reduction in the amount of work that is overseen and approved?
I believe that often alteration work and repairs are most likely to lead to damage to the historic fabric of a building, due to the increased tendency for removing elements of the building or for undertaking work that alters the way a building is read. It is this type of work that requires the greatest supervision by Local Authorities. With the removal of any incentive for the custodian of a Listed Building to apply for approval from the Local Authority there is an increased risk in unauthorised works.
The introduction of VAT is a revenue stream to the Government and the VAT liabilities to Listed Buildings is full of anomalies, key issues that need to be addressed, however, VAT on listed buildings goes wider than this and offers protection measures to the work undertaken and incentives to Listed Building owners to undertake works to ensure the long term sustainability and viability of these buildings. A far more important consideration than income revenues.