Reducing our Expenditure

Making It Easier > Processes > Finances > Reducing our Expenditure

Increasing mission through reducing costs.

There are more ways to resourcing mission, than simply raising more funds. Because it can sometimes appear difficult to do, we occasionally forget the possibilities for cost reductions; in a nut shell, money saving.

An area where a church can often make the biggest savings is with its utility bills. To this end the Church of England in partnership with the Church in Wales has created the Energy Basket

Because as individual churches we are, in business terms, quite small, we regularly miss out on the economic benefits and financial leverage available to larger companies. The aim of Parish Buying is to address these issues and bring the benefits of a large organization to even the smallest church who chooses to participate.
VAT and Churches
This brief section is not intended as comprehensive guide to VAT but as a starting point for those investigating the issues of VAT and how it may impact their church and a place to signpost sources of guidance and advice. As with many statutory schemes, please be aware that the applied rates and registration thresholds change from time to time.

VAT Concessions
Churches, like all charities whether registered or excepted, are required to pay VAT.  However, there are a number of concessions that are currently available to churches and some general charities.

Building Repairs and Maintenance
VAT is applied to all aspects of church building repairs and maintenance.  However, if your church building is listed, then a grant covering the cost of the VAT (for qualifying work only) can be claimed under the Listed Places of Worship (LPW) Grant Scheme. For more on this Scheme see the summary and links on our Capital Funding page 

New Church Buildings
The construction of new church buildings are generally zero-rated for VAT.  Approved alterations to listed buildings are also generally zero-rated as long as they will be used for 'qualifying  purposes'.

Utility Supplies
Water supplies to churches and church halls are zero-rated.  Electricity and gas supplies are subject to a reduced VAT 5% rate, provided that all business usage (hall hire, etc.) falls within set limits.  Use the provided links to check current thresholds, rates and limits.

Fund Raising
The purchase of pre-printed envelopes, etc. for fund raising purposes is currently zero-rated.
Surface Water Drainage
The Flood and Water Management Act 2010 gives water suppliers the authority to offer concessionary rates to charities, in regard to Highways and Surface Water Drainage charges.  All church buildings, church halls and community centres are eligible for these concessionary rates, but at the water suppliers' discretion.