RCB/39/09 VAT—changes to the application of the zero-rate to new buildings used for a relevant charitable or residential use
Revenue & Customs Brief, Issue 39. 1 July 2009
This Brief announces a change in HM Revenue & Customs (HMRC) interpretation of the of the legal provisions that apply the zero rate to new buildings used for a relevant charitable purpose, and the withdrawal of Extra Statutory Concession (ESC) 3.29 and two related concessions. VAT Information Sheet 8/09 (V16.949, Division V16.5) provides further detail.
A building intended to be used solely for a relevant charitable purpose (non-business use) can be zero-rated if the charity provides their developer with an appropriate certificate before the first supply is made.
If, however, the building is put to a business use within ten years of the building's completion, VAT must be paid to HMRC (a change in use charge) to reflect that the building has