This snapshot, taken on
21/07/2014
, shows web content acquired for preservation by The National Archives. External links, forms and search may not work in archived websites and contact details are likely to be out of date.
 
 
The UK Government Web Archive does not use cookies but some may be left in your browser from archived websites.

Revenue & Customs Brief 33/10

VAT: changes to the exclusion of the option to tax on supplies of buildings to be used solely for a relevant residential or relevant charitable purpose, (paragraphs 5, 6 and 7 of Schedule 10 to the VAT Act 1994 refer)

In Revenue & Customs Brief 39/09, HM Revenue & Customs (HMRC) announced changes to the application of the zero rate to new buildings and that, following a review, the phrase 'solely for a relevant residential or relevant charitable purpose' could incorporate a de minimis margin.

In order to avoid unnecessary disputes in marginal cases, HMRC accept that this statutory condition is satisfied for new buildings where the relevant use of the building by the charity or relevant residential user is 95 per cent or more. In light of this review, HMRC announced the withdrawal of Extra Statutory Concession (ESC) 3.29 and two related concessions as we considered them to be no longer necessary or appropriate.

However, ESC 3.29 also allowed charities to exclude the option to tax on supplies of buildings to them (other than parts used as an office) if they were solely used for a relevant charitable purpose. For consistency, HMRC accept that, where the customer and supplier agree, the option to tax can be excluded on supplies of a building or part of a building that is to be used 95 per cent or more for a relevant purpose in the following situations:

  • where a building or part of a building (other than used as an office) will be used by a charity solely for a relevant charitable purpose (paragraph 7 of Schedule 10 to the VAT Act 1994 refers)
  • where a grant is made in a building or part of a building designed solely for a relevant residential purpose (paragraph 5 of Schedule 10 to the VAT Act 1994 refers)
  • where a grant in a building or part of a building is made to a person who intends to use the building solely for a relevant residential purpose (paragraph 6 of Schedule 10 to the VAT Act 1994 refers)

Further information

If you are a charity and you have any enquiries about this brief, please contact the Charity Helpline on Tel 0845 302 0203.

If you are not a charity, please contact the VAT Helpline on Tel 0845 010 9000.

Issued 29 July 2010.