The listed places of worship grants scheme (LPWGS) is to be extended by the Treasury for a further year until March 2021.
Although churches and cathedrals are responsible for fundraising for their own repairs, the scheme will pay grants to cover the VAT incurred on urgent structural work and new roofs in a bid to reduce the burden on congregations to raise funds.
According to the Church of England's 2016 Statistics for Mission, churches and cathedrals collectively run some 33,000 social action projects and contribute £22m a year to the UK economy.
A government commissioned report published in 2017 called for measures to ensure the upkeep and use of church buildings after finding them to play a 'vital role' for community identity and public service.
The decision to extend the grant comes in direct support of the Taylor Review: Sustainability of English Churches and Cathedrals and its recommendations to support the care and maintenance of such buildings to ensure their sustainability for the future.
The LPWGS funding will be guaranteed until 31st March 2021 under the new extended plans, to the benefit of hundreds of additional churches.
Dr David Knight, Senior Church Buildings Officer, said: "We want to thank the Government for their continuing support for churches through the Taylor Pilots and the extension of this scheme.
"It will be a welcome reassurance to many churches with plans for the next year or two that they have certainty over VAT."
Helen Whately, Heritage Minister, said: "Listed places of worship are a precious part of our heritage and we want to make sure they are properly protected and preserved for future generations.
"I'm pleased that many more of these wonderful historic buildings across the country will now benefit from the government's grant scheme."
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