Charity Purchases and VAT

Jul. 20, 2017, 2:38pm

A charity who own a listed property used for charitable purposes are undertaking refurbishment work and alterations to the property.  Will this work be exempt from VAT for the charity?

charity engraved on a stone plaqueIt is a common misconception that charities have exemption from VAT in most areas of their purchasing.  In fact, the reliefs for VAT available to charities on their purchases are somewhat limited and details of the reliefs available can be found in VAT Notice 701/1 (sections 6 and 7).   Where a charity is having a building constructed for a relevant charitable purpose (see Notice 708 s14.7 for the definition) and issues a certificate to the building contractor to that effect, then the construction work can be zero-rated.  However, zero rating for approved alterations to a listed building ceased on 1 October 2012, with transitional relief for projects at that date expiring on 30 September 2015.  This means that the charity’s refurbishment and alterations to their listed property in our example here, will be standard rated.

If you have a VAT query why not contact us to discuss the implications. Our team have a wealth of experience and would love to hear from you.

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