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HMRC announced in Revenue & Customs Brief 39/09 that the ‘charitable buildings’ concession (ESC 3.29) would be withdrawn on 1 July. The department has now moved to remind charities of the withdrawal.
Charities wishing to make use of the concession before 1 July must issue the necessary certificate before that date, and by 1 January 2011:
- the building must have been constructed to a point above foundation level; or
- the charity must be in occupation of the building if it is being acquired or leased.
If the certificate is not issued in time or the other conditions are not met, the charity will not be eligible to use ESC 3.29 to secure zero rating for the building.
Charities, and those who use buildings solely for a relevant residential purpose, may still acquire or construct new buildings zero-rated for VAT providing they are able to demonstrate that the building is intended to be used 95% or more for a relevant residential or relevant charitable purpose.
Further guidance can be found in VAT Information Sheet 13/10.
