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New queries

11 February 2014
Issue: 4439 / Categories: Forum & Feedback

Back to university; The giveaway; Sweet charity; Flogging it

Back to university

What is the correct level of VAT to be paid on building work for a university?

My client is carrying out some building work on a new university building. The building will apparently be partly used for a “relevant charitable purpose” by the university this purpose being linked to research activities.

This is where things become a little more complex.

My client has received a copy of some very detailed and confusing correspondence between HMRC and the university’s accountants. The letters talk about a 4% input tax recovery on the project costs by the university linked to the fact that there is 96% non-business use.

The contractor who my client is working for has therefore asked my client to charge VAT on only 4% of the total invoice value because the other 96% of the work is linked to a charitable use.


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