Approved alterations to protected buildings

By Tolley
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The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Approved alterations to protected buildings
  • Revised VAT treatment effective from 1 October 2012
  • VAT treatment before 1 October 2012
  • Mixed use developments

This guidance note provides an overview of the VAT treatment of approved alterations to a protected building.

Revised VAT treatment effective from 1 October 2012

Work undertaken in the course of an approved alteration to a protected building can no longer be zero-rated with effect 1 October 2012 and is now liable to VAT at the standard rate. However, the disposal of a protected building that has been substantially reconstructed remains zero-rated. The revised VAT treatment is outlined below.

VATA 1994, Sch 8, Group 6, items 2–3; VCONST08900; FA 2012, Sch 27; De Voil Indirect Tax Service V4.239 (subscription sensitive); HMRC Notice 708 

HMRC has stated that they amended the legislation for the following reasons:

“The purpose of these changes was to remove the anomaly whereby the approved alteration of protected building was zero-rated but their repair and maintenance (and the alteration of other types of building) was standard-rated. The VAT treatment of approved alteration to protected buildings has been a source of major confusion, resulting in a high volume of taxpayer query and frequent error. These changes remove the need to try to distinguish between alteration and repair or maintenance, and remove the incentive to alter, rather than repair, listed buildings.”

Transitional relief from 1 October 2012 to 30 September 2015

The transitional arrangement continued to apply to one of the following until 1 October 2015:

VCONST08950
  • supplies of any services, other than excluded services, which are made in the course of an approved alteration to a protected building and pursuant to a written contract entered into, or a relevant consent applied for, before 21 March 2012
  • supplies of building materials which are made to a person to whom the supplier is

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