UK Churches Face Rising Costs After Loss of VAT Reclaim Scheme

The financial and maintenance challenges faced by historic church buildings in the UK are escalating, even as the National Churches Trust has distributed over £2.6 million in grants throughout 2025. Despite this support, church buildings are under increasing strain, highlighted by the Trust’s recent annual review.

In 2025, the Trust awarded 326 grants to churches, chapels, and meeting houses, a slight increase from 314 in 2024. These grants assisted 252 places of worship, with nine individual grants exceeding £40,000. The support has been crucial for many, with about a third of the funds directed towards churches in disadvantaged communities and aiding 12 churches to be removed from the Heritage at Risk Register.

However, the landscape for financial support has shifted significantly following the government’s decision to abolish the Listed Places of Worship Grant Scheme (LPWGS) in January 2026. Initially introduced in 2002, this scheme allowed listed places of worship to reclaim VAT paid on repairs. Although extended for one year in 2025 with a reduced budget, it has been replaced by England’s new four-year Places of Worship Renewal Fund, which will allocate £92 million, averaging £23 million annually.

The National Churches Trust expressed concerns that this new scheme does not cover the VAT costs on repairs, a burden that could lead to project cancellations or the scaling back of necessary repairs. “Every listed church carrying out repairs now faces 20% extra costs,” wrote Sir Philip Rutnam and Claire Walker from the Trust in their annual review.

The Trust’s National Churches Survey, which included input from 3,628 churches across more than 70 denominations, underscored the scale of the issue. Over a third of church roofs were identified as “at risk or in urgent need of repair.” Additionally, many churches struggle with finding volunteers and securing the funds needed for ongoing maintenance.

Churches play a vital role in communities, with more than 830,000 people volunteering regularly across the UK. The survey noted that a typical congregation relies on about 265 hours of volunteer time each month. Despite these challenges, churches continue to conduct regular services, with 80% holding services at least weekly.

Archbishop of Canterbury Sarah Mullally emphasized the historical and cultural significance of church buildings, describing them as “landmarks of our nation’s Christian inheritance.” She highlighted the importance of collaboration to preserve these structures, which embody “faith, community and belonging.”

The Church of England, which has approximately 16,200 churches and cathedrals, faces its own challenges, with about 927 of its places of worship listed on the 2025 Heritage At Risk Register. A shortage of skilled craftspeople, such as stonemasons and heritage carpenters, further complicates maintenance efforts, as noted by the Trust.

Efforts are underway to address these shortages through training programs, apprenticeships, and initiatives to preserve the art and heritage of church interiors. Fr Patrick van der Vorst highlighted the power of beauty in church buildings to inspire reflection and prayer.

At a recent conference in London, the Trust called for more substantial government investment in church buildings. Their campaign advocates for recognizing church buildings as national heritage, establishing a £50 million annual capital funding program, and providing more support for volunteers. As broadcaster Rob Rinder stated, preserving churches is about “protecting the possibility of a future where sacred space still means shared space.”

The Trust’s income grew significantly from £2.9 million in 2022 to £5.22 million in 2025, supported by major donors and charitable foundations. Their Treasure Ireland project and Cherish programme have delivered substantial grants to support church repairs in Northern Ireland, Scotland, Wales, and North West England.

Ultimately, the National Churches Trust remains committed to maintaining and valuing the UK’s church buildings, which serve as both architectural treasures and vital community hubs.