When a charity rents a premises, and the activity they carry out is non business, any vat on the rent can be exempted if the option to tax is disapplied.
If the activity is 50/50 business/non business can the rent be 50% taxable 50% exempt?
or is an an all or nothing thing (ignoring the 5% for 'office' rule)
It does seem unfair to penalise the whole rent if, say, you had just 10% business activity- yet if that business actvity were housed in another building the original building would qualify in full for the exemption. But perhaps the rules are as black and white as they seem. I guess I'm appealing to exceptions such as the rules around fuel&power @ 5%, where if more than 60% is non business then the whole supply is 5%. Or business rates where if 'mainly charitable purposes' then the 80% mandatory relief applies on the whole.