Commentary

V4.232BC Relevant charitable purposes (RCP)

Part V4 Exemption, zero-rating and reduced rates

V4.232BC Relevant charitable purposes (RCP)

V4.232BC Relevant charitable purposes (RCP)

This paragraph examines when a building is intended for use solely for a relevant charitable purpose. The term is used in VATA 1994, Sch 8, Group 5 and has relevance for whether a supply will qualify for zero-rating under this provision. For an overview of the scope of zero-rating under this Group, see V4.231.

Meaning of relevant charitable purpose—legislation

VATA 1994, Sch 8, Group 5, note 6 sets out that use for a relevant charitable purpose means use by a charity in either or both of the following ways:

  1.  

    •     use otherwise than in the course or furtherance of business

  2.  

    •     use as a village hall or similarly in providing social or recreational facilities for a local community

Whether use by a charity—RCP (zero-rating)

For the definition of 'charity' generally in the context of the VAT legislation, see V1.299.

In Witney Town Bowls Club1, it was held that the construction of a new clubhouse by the appellant, a Community Amateur Sports Club ('CASC'), did not qualify for zero-rating since the appellant was not a charity. With effect from 1 April 2012, the definition of 'charity' for VAT purposes (see V1.299) requires that the body be 'established for charitable purposes only'. 'Charitable purposes' has the meaning given by Charities Act 2011, s 2; however, this is subject to s 6(1), which provides that a CASC is not to be regarded as established for charitable purposes. It also considered that the clubhouse was used for business purposes, and that it

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