Reducing our expenditure

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Reducing costs is another way to increase our mission

There are more ways to resourcing mission than simply raising more funds.

Because it can sometimes appear difficult to do, we sometimes forget the possibilities of reducing costs to save money.

A church can often make big savings with its utility bills. To help churches to get the best deal, the Church of England in partnership with the Church in Wales has created the Energy Basket.

As individual churches we are, in business terms, quite small, so we often miss out on the economic benefits and financial leverage available to larger companies. The Parish Buying scheme aims to address this and bring the benefits of a large organization even to the smallest church which chooses to participate.
VAT and Churches
This is a starting point if you are investigating the issues of VAT and how it may impact your church.

It is not intended as comprehensive guide to VAT, but as a source 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 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, 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 is 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 5% VAT rate, provided all business usage (hall hire, etc.) falls within set limits. Use the useful links provided to check current thresholds, rates and limits.
  • Fund-raising: The purchase of pre-printed envelopes, etc. for fund-raising 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 for Highways and Surface Water Drainage charges. All church buildings, church halls and community centres are eligible for these concessionary rates, at the discretion of the water supplier.