Member Since: 2nd May 2012
Linda is an Assistant Director, VAT with Buzzacott in London and has over 30 years’ experience in VAT. She joined HM Customs and Excise (now HMRC) after University and moved into private practice in the 1980s. She has worked for BDO Stoy Hayward, Grant Thornton and PricewaterhouseCoopers and SOC VAT Consultants where she specialised in advising charities, not for profit organisations and property companies, and as a VAT technical writer.
Linda advises not for profit organisations, charities, and social enterprises on VAT and in particular capital projects, partial exemption, and international services. She is currently Vice chair of the CIOT Indirect Tax Technical Committee and a member of the VAT Practitioners Group.
Assitant Director Buzzacott
2nd May 2012
I am afraid that Tim is correct.
The key point is that Sch 8 Group 5 Item 2 Note (6) clearly states that to achieve zero-rating the charity has to be using the building concerned for non-business purposes. It is a well established principal of VAT law (not HMRC guidance) that providing services in return for consideration (payment) is a business activity. Providing educational services in return for the payment of fees is therefore a business activity as HMRC's guidance confirms. All private fee paying schools (whether or not they are charities) are therefore carrying on a business activity and buildings used for that purpose are not eligible for ZR relief under item 2.
I should add that the Newnham case won't assist here because that was a 'library' scheme where the subsidiary used in the planning was occupying a library building and supplying library services to the College - not the case in Tim's scenario.