Readers’ forum: Does delay in building new charity centre affect VAT?

06 June 2022

Issue: 4843 / Categories: Forum & Feedback

New build

I act for a local charity which has received planning permission to build a new centre to help meet the needs of homeless people. The work will qualify for zero rating as a new building to be used for a relevant charitable purpose.

However due to financial constraints the charity has decided to build part of the centre now to make it active as soon as possible but six private computer rooms and extra care facilities will not be completed until 2024 when funds are available. This extra work will cost £500 0000.

My understanding is that the work in 2024 will also be zero rated because it is part of the planning consent for the overall building. However a colleague has said that the work will be standard rated because zero rating only applies up until the new building is first occupied and it will...

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