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HMRC internal manual

VAT Construction

Certificates for qualifying buildings: change of intention in the course of construction

A certificate only indicates the intended use of a building at the time it is issued. However, intentions may change during the course of construction or conversion.

Where the intention changes from a qualifying purpose to a non-qualifying purpose, zero-rated or reduced-rated works carried out prior to the change in intention aren’t to be amended retrospectively to standard-rated but must be standard-rated from the date of change in intention. Subsequently, when the building is first used for a non-qualifying purpose, a taxable charge may arise at that point in respect of the works that had been zero-rated (VCONST20000).

Where the intention changes from a non-qualifying purpose to a qualifying purpose, standard-rated works carried out prior to the change must remain standard-rated. VAT on the supplies mustn’t be credited.