THERE are fears a 162-year-old church might become obsolete due to a controversial tax change that could land it with a £50,000 VAT bill.

Parishoners at grade-II listed St Mary’s Church, Malpas, Newport, have worked since 2004 to raise £360,000 to modernise the building.

But despite having raised £305,000 for the project they now fear the plan could be scuppered after a tax-break for alterations to listed buildings was ended in March’s budget.

The changes will mean works on listed buildings, such as that planned at St Mary’s Church, will incur 20 per cent VAT from October.

Parishoners are now calling on the government to rethink the plans, which fundraiser Chris Pennant said was a “major setback”.

Mr Pennant, who is also church warden, said: “People have worshipped here for 900 years, including in this building for the last 162 years, and we’ve worked desperately hard for eight years to raise a huge amount of money – now all that history and toil could be jeopardised by a punitive new tax.

“Ours is not an affluent parish and the additional cost may make it impossible for us to go ahead with the project.”

The Parish Church of St Mary was rebuilt in 1850 in a neo- Norman style.

Although used for worship and other church service it lacks modern amenities, and in 2004 parishioners began raising cash to build an extension featuring a toilet and meeting room with kitchen facilities.

The plan would extend the life of the church for many years.

Tax expert Liz Maher, of Newport-based Centurion VAT Specialists, said fundraisers are unsure how a grant scheme announced in May for church buildings will operate. She said: “It has not allayed their fears.”

EDITORIAL COMMENT: VAT ruling is a real blow

IT WAS perhaps not one of the more headline-grabbing tax changes of chancellor George Osborne’s March Budget.

But, if the experience of a group of Newport churchgoers is anything to go by, it could prove to be one with huge repercussions.

The changes have ended taxrelief on alterations to listed buildings, meaning major repair and refurbishment projects, such as that proposed for St Mary’s Church, in Malpas, will nowincur VAT at the full 20 per cent.

For the dedicated Newport parishioners who have spent the past eight years raising £305,000 towards the £360,000 expected cost of the refurbishments the Malpas church needs, the news has come as a bitter blow. They now face having to find an extra £50,000 just to pay the taxman.

We can understand why they feel so aggrieved and we support their calls for the government to change its mind, or at the very least do something to ameliorate their situation.

Over the border, the Church of England has negotiated a deal with the treasury to award it an extra £30 million a year, which it will then use to help individual churches pay their VAT bill. In effect, the government is giving the money out knowing it will get it back.

Unfortunately this system is not in place in Wales. In other words, unless the rule is changed this small group of parishioners, who have worked so very hard, face either years more fundraising or even the prospect that their project is now unaffordable.