VBNB44500 - Specific issues: Religious services

A religious service is an act of worship following prescribed rules, that is open to the general public. This guidance is applicable only to religious services provided by ministers of religion in religious buildings. This does not apply to services that are not principally religious in nature, such as graduations or recitals that are held in religious buildings.

Types of religious services

Acts of worship, where there is no fixed fee, are a non-business activity. The services are conducted for religious purposes and are open to the general public.

This guidance is predominantly concerned with services that are for a religious purpose and involve a fixed fee (rather than an optional donation). These are usually associated with life events such as weddings, funerals and memorial services.

VAT treatment for components of a religious service

There are various components of a religious service. This guidance is intended to provide clarity on how to treat them for VAT purposes.

Charges associated with the provision of the religious service (including parochial fees) relating directly to performing an act of worship are outside the scope of VAT. These are non-business activities for the purpose of VAT. Further information about how to determine whether something is a business activity can be found VBNB1000

Statutory Fees set out in the Anglican Table of Parochial Fees charged by parish churches and by cathedrals which are also parish churches and any equivalent fees charged by cathedrals which are not also parish churches are outside the scope of VAT.

Supplies integral to delivering acts of worship, which are outside the scope of VAT, include:

  • Hire of the religious building, or part thereof, for the service
  • Provision of a minister of religion and other staff necessary for the service
  • Provision of religious music by the provider of the service, including; organ and organist, choir, piano and pianist, worship band and bell ringing

Other supplies made in connection with an act of worship which are essentially commercial in nature and which could be provided externally, such as supplies of catering, the hiring of external musicians, flowers and printing of orders of service, are business supplies and liable to VAT at the prevailing rates.

Some illustrative examples of how this guidance may apply in practice are as follows:

  1. Wedding service held in a cathedral – The charges are for the building, minister and cathedral choir with a total fee of £150. These are all supplies integral to delivering the act of worship. This is all outside the scope and no VAT is due.
  2. Wedding service held in a cathedral – The charges are for the building, minister, cathedral choir & florist with a total fee of £200. No output tax is due on the integral supplies (as listed above) but output tax is due on the florist element.
  3. Wedding service held in a cathedral – The charges are for the building, minister, cathedral choir and external harpist with a total fee of £250. No output tax is due on the integral supplies (example 1). Output tax is due on the services of any external musicians, in this case the external harpist.

How this affects exempt supplies

Religious organisations that provide exempt supplies should be mindful of the Partial Exemption position. Further guidance on this can be found link to the PE main page.