Covid-19: VAT change of use of relevant charitable or relevant residential buildings
Charities and businesses which have temporarily changed the way in which their premises are used during the Covid-19 crisis may be at risk of incurring an unexpected VAT charge under the change of use provisions.
Dated: 23 June 2020 Author: Terri Bruce, Director of Indirect Tax for SMEs and Not for Profits
A VAT cost could be incurred if the use of the building no longer meets the requirements for zero-rating. This could affect relevant residential or relevant charitable buildings which were completed after 1 March 2011.
HMRC has updated Notice 708 to include a paragraph which states: “If the use of a certificated building changes or the building is disposed of, as a direct result of coronavirus (COVID-19), and a self-supply charge is due, you should contact HMRC through your customer compliance manager or the charities compliance team by email: firstname.lastname@example.org”.
Charities and businesses which may be affected by the above are urged to be cautious and consider their position.
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