HM Revenue and Customs Brief 05/11
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Issued 24 January 2011
VAT: simplification of the 'change in use' provisions for
buildings zero-rated because they were intended to be used for a
relevant residential and relevant charitable purpose
This Brief announces a simplification of the ‘change in use’
provisions (Paragraphs 35 to 37 of Part 2 of Schedule 10 to the Value
Added Tax Act 1994) by Value Added Tax (Buildings and Land) Order 2011
With effect from 1 March 2011, there will no longer be two
adjustment mechanisms (each with its own rules on how to calculate and
apply a tax charge) to apply to the two sets of circumstances where a
‘change in use’ occurs.
Instead, there will be a single adjustment mechanism to be
applied in all circumstances. It will be based on the:
- amount of VAT that would have been chargeable on the
original supply (or supplies) had the building in question not been
eligible for the zero rate;
- proportion of the building that is affected by the change
- number of complete months that the building has been used
solely for a qualifying purpose prior to the change in use.
These changes have been made following a consultation,
announced in Revenue & Customs Brief 49/10, on proposals to
simplify the provisions.
Further information on whether a 'change in use' has occurred
and how to calculate the tax charge can be found in VAT Information
Sheet 04/11, which will be published shortly.
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© Crown Copyright 2011.
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Article Published/Sorted/Amended on Scopulus 2011-01-26 14:13:18 in Tax Articles