Hit by VAT on building work?

The submission will highlight in particular buildings of historic importance which are not necessarily listed. Although it will not concentrate exclusively on the impact on charities, the voluntary and community sector will be one of its major areas of focus. The timeframe is incredibly tight (an initial paper will be sent to the Treasury in two weeks) and so the Charities Tax Reform Group is trying to gather examples from the sector which can be used – in two areas specifically:

A reduced VAT rate is available for the conversion of commercial buildings for ‘relevant residential purposes’ (RRP), but not for conversion for ‘relevant charitable purposes’ (RCP). Extending the reduced rate to cover RCP would have a significant impact on the sector, and so we are looking for specific examples of any project of this kind that was adversely affected by the VAT burden – particularly if the VAT bill has led to building project having to be abandoned.

Alterations and extensions of charitable buildings are zero-rated, but, illogically, repair and maintenance is not. Again, any examples that members are prepared to share of the VAT cost of repair and maintenance, and its impact, would be much appreciated.

Given the deadline, the group would be very grateful if replies could be sent in the next two or three days.

Please reply initially to paul.mcgill@nicva.org. He will pass the information on to the group.