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Reality or rumour?

19 June 2012
Issue: 4358 / Categories: Forum & Feedback , Budget 2012 , VAT
A new church hall is to be built as an extension to an existing church which is a listed building, but the addition of 20% VAT may cause this plan to be abandoned

I have a charity client that will be building a new church hall in 2013 as an extension to the existing church which is a listed building.

If the chancellor’s plans to add VAT to the building services on such projects are turned into reality (from 1 October 2012) then our client will have to abandon the project because of the 20% extra cost.

However I have heard on the grapevine that a way around the problem would be to change the wording on the planning documents from ‘extension’ to ‘annexe’ and then the builder services will still be zero-rated next year.

This seems too good to be true.

Do readers have any views on the accuracy of this rumour?

Query 18 009 – Church Warden

Reply from Alex Millar Millar Taxation Limited

There is some truth in the rumour Church Warden has...

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