Change of use
Charities that have obtained zero rating for their new buildings or construction services under Extra-statutory Concession 3.29 will no longer be liable for any VAT charge when there is a change of use of the building within ten years of the zero rate having been obtained.
Change of use
Charities that have obtained zero rating for their new buildings or construction services under Extra-statutory Concession 3.29 will no longer be liable for any VAT charge when there is a change of use of the building within ten years of the zero rate having been obtained.
With effect from 21 March, HMRC will not enforce this self-supply charge when there has been a change of use that was not anticipated at the time that zero rating was obtained under the concession. This means that any charity using the concession to obtain zero rating and whose non-qualifying use subsequently exceeds 10% within the ten-year adjustment period, will not be required to account for a self-supply charge. However, if it is apparent that, at the time that zero rating was obtained, it was intended that non-qualifying use would exceed 10% within the ten-year adjustment period, HMRC will consider that the original supply should never have been zero rated in the first place.
Any charity that has paid a change of use charge in the last three years may be entitled to a refund. Those who are, or have been but are no longer, VAT registered can make an adjustment. Those who have never been VAT registered can apply for a refund to the following address, giving full details of how they calculated and accounted for the 'change of use' charge: HMRC Charities, St Johns House, Merton Road, Bootle, Merseyside L69 9BB.
This change may also affect the position of any charity that obtained zero rating under VAT Act 1994, Schedule 8 Group 5.
HMRC Brief 29/07, 27 March 2007
