After several years of dedicated planning by a loyal band of volunteers, two local churches are delighted to announce successful lottery bids. However, for St Catherine's in Hoarwithy and St Deinst in Llangarron, the news is bittersweet. The recent move by the Government to introduce VAT payments on alterations to listed buildings means they will have to find at least another £30,000

"This could be a disaster locally," said Bishop Anthony Priddis, "where most of our historic churches are Grade I or Grade II* listed buildings. It could just be the straw that breaks the camel's back for many of our small communities struggling to keep their buildings secure."

The Italianette Hoarwithy Church is of great architectural significance – "it oozes architectural interest," said Church Warden Peter Pember. Younger than some of its more ancient counterparts, St Catherine's can boast its fair share of cultural history. One of its stained-glass windows is by Pre-raphaelite Edward Burn Jones and the wood carving in the choir stalls is sublime. Yet, buildings like these require maintenance and its distinctive tower shows serious signs of wear and tear. Peter Pember told the Gazette that this will cost nearly £185,000. So, news of their successful bid – £99,000 from English Heritage/Lottery fund and £11,500 from the Herefordshire Historical Church Trust – was very welcome. Slapping VAT on the cost of the building work is unwelcome. In real terms, they will now have to find another whopping £25,000. For Peter and his trusty fellow volunteers, this is a real blow.

Llangarron Community Association (the LCA) announced their successful lottery bid this week for a development grant of £39,000 from the Reaching Communities Buildings Lottery Fund to convert the North Aisle of the Church into a multi-use community venue.

Grade I listed St Deinst has many historical treasures including a 14th Century font and a Jacobean pulpit dating from 1630.

Volunteers Rosie Wilson and Irene Brewer are delighted at their successful grant application and talk enthusiastically about the project. It will, they said, help secure the future of the church and leave a functioning legacy for future generations by maintaining the fabric of the church and developing the North Aisle as a new community venue.

For them too, VAT news has created a huge headache. "Churches are run by a gallant and committed groups of volunteers," said Rosie Wilson, "who all give up many hours of their time. It feels like we are being penalised and thwarted in our efforts. Now we have to do extra fundraising that we hadn't factored in. It is another complication that we just don't need." Their project to transform St Deinst will now have to find another £55k.

The Gazette approached MP Jesse Norman and he said: "The proposed new VAT measures on listed buildings are under consultation until May 18th. My own view is that they are thoroughly ill-advised, and they have created huge concern among my many constituents who attend or care for church buildings.

"I have been pressing this matter hard with the Government over the past few weeks. In response to public concern, the Treasury Minister, Lord Sassoon, has so far stated in Parliament that the Government's intention is that listed churches will be fully protected against the impact of the VAT change. But a rebate does not go far enough; what is needed is a restoration of the original zero-rating, or an outright exemption.

"I would encourage all interested Gazette readers to write in to register their concerns. Visit: http://www..hmrc.gov.uk">www..hmrc.gov.uk and click on 'VAT: Addressing borderline anomalies'.

Undiminished, Peter, Rosie and Irene will continue their work. Visit the churches and see for yourselves.