The Budget: Lower rates for churches and community sport

Churches

Churches and non-profit-making sports centres are to benefit from lower tax rates as part of what the Chancellor claimed was the Government's commitment to the community.

Churches and non-profit-making sports centres are to benefit from lower tax rates as part of what the Chancellor claimed was the Government's commitment to the community.

Mr Brown announced the introduction of a new grant scheme for churches, which will come into effect from 1 April. He described churches as "essential centres for civic life", and said they "are at the heart of our rich heritage as a nation". The initiative is designed to relieve some of the pressure placed on congregations when money needs raising for church repairs.

The new grant, for the repair and maintenance of listed buildings used as places of worship, will be equivalent to a reduction in the rate of value-added tax (VAT) from 17.5 per cent to 5 per cent. This is planned as an interim measure until the Budget Commission undertakes a review of VAT rates in 2003.

The new grant is likely to make a big difference to many communities. Declining congregation numbers have made the task of financing repairs increasingly difficult for dioceses, with many churches being in need of repair.

The Chancellor added a further pledge to non-profitmaking sports clubs, which he also described as a central part of the community. Although no exact details were given, Mr Brown announced the Government's commitment to consultation on finding "the best way for the tax system to give [non-profit sports clubs] further support and to recognise their contribution to community life".

The timetable for the consultation has yet to be decided.