VAT & Places of Worship

I am just completing an application for a project which we should be able to reclaim VAT back via a Places of Worship grant.

Since VAT will have to be paid before receiving a grant,  how should VAT be shown in the project costs of our application?

How do other projects handle having to pay VAT before receiving the places of worship grant?

All help and advice appreciated.


Hi Fiona,

In your application you should list the VAT you will pay in the separate VAT column of the cost tables. You should then list the amount you plan to reclaim through the government's listed places of worship scheme as an unsecure grant in the 'income section.'

When planning your project it is important to look at your group's cash flow because you are right you will need to pay the VAT in your invoices before you can 'claim' the VAT back through the government's scheme. Most churches manage to keep a small cash reserve in their bank account to bridge the gap between payments going out and grants coming in. If your church is struggling with reserves and cashflow it is best to talk to your diocesan support officer about what options there are (if you are Church of England).

I hope this has helped,