Churches across England and Wales will crumble into disrepair if Chancellor Rachel Reeves introduces a planned ‘stealth tax’ on the historic buildings, campaigners have said.

Ms Reeves - who has already infuriated farmers, pub landlords and most of the business community with her policies - has now angered vicars by declaring that from April, churches will no longer be exempt from paying VAT on repairs.

When she became Chancellor in 2024, Ms Reeves reversed Tory policy which allowed churches to offset all VAT payable on repair bills by capping the allowance at £25,000 a year. Now she is removing the tax break in its entirety.

According to the National Churches Trust, which is leading the campaign to save the almost 1000 churches, chapels and cathedrals in England and Wales in urgent need of repairs, churches provided £55 billion worth of ‘social benefit’ to the UK annually. 

It says that the Treasury’s own calculations say that for every £1 invested in churches, over £16 is returned to local communities.

Sir Philip Rutnam, Chair of the Trust said: ‘These statistics should be an alarm bell for the Government – now is the moment to act to save these important buildings before they fall even more into disrepair. 

'Once these buildings are gone, they are gone forever. There is no second chance to rescue them.’

Meanwhile, the Prime Minister’s local church has been quietly rescued with hundreds of thousands of pounds of public money. St Mary’s Somers Town, which is in Starmer’s constiuency, received £639,000 from the Government for its repairs.

The 500-year-old St Mary's church in Totnes, Devon, is one church which is facing slow decay and at risk of collapse

Ms Reeves - who has already infuriated farmers, pub landlords and most of the business community with her policies - has now angered vicars by declaring that from April, churches will no longer be exempt from paying VATon repairs. Pictured: St Illtud's Church, Llantwit Major

According to the National Churches Trust, which is leading the campaign to save the almost 1000 churches, chapels and cathedrals in England and Wales in urgent need of repairs, churches provided £55 billion worth of ‘social benefit’ to the UK annually. Pictured: St Illtud's Church, Llantwit Major

Calling for him to reverse the ‘church tax’, Tory MP Saqib Bhatti said: ‘The Christmas period is an important reminder of the role churches play in our communities. 

'They are custodians of our heritage and are important places of sanctuary for people of all faiths and none.

‘That’s why Labour’s cut to the Listed Places of Worship Grant Scheme is so damaging.