Private country house owners need a “level playing field” with the National Trust on tax if their heritage is to be secured, a former chairman of the charity has warned.
Sir William Proby, the head of the National Trust between 2003 and 2008, said the owners of manors had endured a “savagely difficult time” during the coronavirus pandemic but their role in society had “never been more important”.
He told the annual general meeting of Historic Houses, the association for 1,500 grand properties across the UK, that “the first and most important rule is survival, and that is now what we have to do”.
The majority of Britain’s manors open to the public are not owned by charities or government agencies, meaning they cannot benefit from Gift Aid, access to grants, VAT relief or other advantages of charitable status available to bodies such as the National Trust.
Massive cost of maintaining properties
Sir William said: “If our part of the heritage is to be secure, we need to have a fiscal background that allows owners to put the massive cost of maintaining their properties against other income.
“It comes down to having a level playing field compared to the National Trust, English Heritage and the public sector.”
He singled out rising repair costs, which are subject to 20 per cent VAT, and sideways loss relief as two areas in which aristocrats who have owned properties for generations are lobbying ministers to change.
Historic Houses estimates that owners face a conservation backlog of nearly £1.5 billion-worth of essential repairs and maintenance, of which nearly £500 million is urgent.
This has grown further during the pandemic, as turnover has halved, visitor numbers have fallen by three quarters and houses have been unable to bring in their usual income from wedding and events rentals, film sets, holiday accommodation or public attractions.
The National Trust’s annual report for 2020-21 shows that it received £79 million from individual donors, charitable trusts, grant funders and gifts in wills.
Sir William, who lives at Elton Hall, near Peterborough, the home of the Proby family since 1660, quoted Henry James in his speech. He said: “Of all the great things that the English have invented ... the most perfect, the most characteristic is the well appointed, well administered, well filled country house.”
Income tax bill could come as a shock
He told the meeting of house owners: “In a few weeks’ time you will be told by your accountant what tax you need to pay for the last tax year, and I bet many of you will be surprised that in a year when you’ll have made substantial losses you’re still going to pay a large tax bill.
“But in the meantime, we face rising costs, higher interest rates, a higher minimum wage, increased National Insurance and the greatest tax burden as a nation since the years after the Second World War. And of course the burden of regulation increases inexorably.”
Country house owners warned last year that they face soaring maintenance bills as a result of climate change and stormy weather creating more leaky roofs, damaged masonry and flooded cellars than ever before. They have also told Boris Johnson a mansion tax could force valuable artwork to be sold.
Historic Houses also wants the Government to reduce income tax on Heritage Maintenance Funds (HMFs) from 45 per cent to 20 per cent to allow nationally important properties to ring-fence funds for maintenance.
It says just eight per cent of houses have an HMF and that as a result the UK is missing out on up to £85 million in net economic benefits.
In his speech, Sir William said the role of private country house owners “has never been more important”, claiming the National Trust had “turned its back on this part of the national heritage, apparently wishing to portray their houses as monuments to slavery, exploitation and inequality”.