The Government has announced a new £92m Places of Worship Renewal Fund, aimed at supporting churches following recent changes to tax exemption rules.

The new fund will replace the Listed Places of Worship Grant Scheme, a £23m programme that had been in operation since 2001. That scheme allowed churches to reclaim VAT on repairs to listed buildings, helping to support their ongoing maintenance and conservation. In recent years, the scheme had been amended to cap VAT-exempt repairs at £25,000, before now being fully replaced by the new fund.

The Government says the £92m investment will brig churches “into line with other heritage assets”, giving them access to the same level of financial support as historic houses, monuments and other sites of national importance.

However, concerns have been raised about how effective the new scheme will be. Sir Philip Rutnam, Chair of the National Churches Trust, welcomed the announcement but warned of significant challenges.

“We welcome the announcement of a new capital funding scheme for the country’s religious heritage. We have been campaigning for this for some time, and we look forward to understanding how the new scheme will operate. Churches depend overwhelmingly on volunteers so the scheme will need to be simple, accessible and predictable if it is to be a success.

He added that the removal of VAT relief on repairs would place a heavy burden on local congregations.

“We are very concerned that in future listed places of worship will have to bear the full cost of VAT on repairs. This brings to an end a system that has operated successfully for over 20 years. It means that in future local people will have to raise money not just to repair roofs and towers but to pay a 20 per cent tax to the Government."

Sir Philip also highlighted what he described as an inconsistency in the policy, noting that museums and galleries offering free admission do not pay VAT on repairs, while churches will now be required to do so.

Ben Sims, Acting Head of Policy and Public Affairs at the National Churches Trust, also expressed concern about the impact on local communities, warning that the need to raise additional funds for VAT could divert time and resources away from the charitable work churches have traditionally played a major role in.

In a statment, The Department for Culture, Media and Sport said the grant has been awarded in light of “the important role religious heritage buildings play in the UK’s national story”.

It's part of an overal £1.5bn package to "restore national pride".