HM Revenue and Customs Brief 33/10
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Issued 29 July 2010
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.
About the Author
© Crown Copyright 2010.
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educational / informational purposes only. Article reproduced by permission of
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updated regularly and may be out of date at time of reading.
