Reality or rumour?

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...