VAT and charitable buildings: Don’t get caught out

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Scott Craig offers a brief summary of the change in VAT rules for charities’ premises.

Misinformation about HMRC withdrawing a valuable concession that allows the zero-rating of charitable buildings has resulted in concern among charities. Unsolicited mail shots are one of the prime causes of this current confusion, but the fundamental fact is that the concession was never available to many organisations in the first place.

To qualify for zero-rating, a building must be used by a charity ‘solely’ for non-business purposes. Broadly speaking, the existing concession defines ‘solely’ as 90% of the time. From 30 June 2010, the term ‘solely’ will be defined as 95% of the time, and HMRC wants this position monitored for a further ten years. This i...

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