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HMRC internal manual

VAT Construction

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HM Revenue & Customs
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‘Approved alteration’ of a ‘protected building’ (changes introduced on 1 October 2012): Evidence of zero-rated entitlement under the transitional arrangements

Evidence required to zero-rate an approved alteration to a protected building up to 30 September 2015

In order to obtain zero-rating under the transitional rules, persons carrying out approved alteration works must be able to show that

  • the relevant consent was applied for before 21 March 2012 or that a written contract for the work was in place before 21 March 2012; and
  • that the works performed are included within the scope of the consent or contract.

Acceptable evidence would include copy of the relevant consent. If the consent is dated as given before 21 March 2012, other evidence is not needed otherwise one of the following should be held:

  • evidence of posting or delivery of the relevant application prior to 21 March 2012; or
  • acknowledgement from the relevant authority of receipt of the relevant application by 21 March 2012; or
  • a copy of the contract for the works including proof that this was entered into before 21 March 2012.

Evidence required to demonstrate that 10 per cent of the substantial reconstruction work was completed prior to 21 March 2012

Acceptable evidence of the substantial reconstruction completed before 21 March 2012 would include surveyors’ estimates, works schedules, evidence of invoicing or payment applications for completed works prior to 21 March 2012 and commercial documentation which clearly indicates the amount of reconstruction work completed on a date before 21 March 2012.

Evidence required to zero-rate an approved alteration to a listed place of worship up to 30 September 2015

The builder will need to be satisfied that the relevant permission under the ecclesiastical exemption had been applied for prior to 21 March 2012 and has not expired, and that the works are within the scope of that application. It may be helpful if a copy of the application, (eg for works on Church of England buildings, the faculty application), is provided to the builder along with the certificate confirming the building is to be used for a relevant charitable purpose.

Alternatively, the approved alteration will be zero-rated where it is within the scope of a written contract in place before 21 March 2012.

Responsibility for determining whether VAT is charged

It is the responsibility of builders to apply the correct rate of VAT and to ensure they can provide satisfactory evidence of the entitlement to any zero-rating.