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HMRC internal manual

VAT Construction

HM Revenue & Customs
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Relevant charitable purpose concession (pre-1 July 2010 only): approving a method


A charity could use the concession when it found that some non-qualifying use would be made of the building. A charity could (following approval where applicable) use any of the concession methods outlined above. The charity could therefore choose the method that most favoured its own circumstances. You could not refuse to approve an application simply because an alternative method was available.

Circumstances when approval couldn’t be given

Reasons for refusing to approve an application included where the application was for:

  • a method that wouldn’t be applied fairly and reasonably - for example, a head-count method that didn’t take all relevant uses into account
  • a method not within the concession
  • a mix of the methods within the concession
  • approval to apply the floor space method or head count method to parts of a building.

If an application was refused, it was the responsibility of the charity to apply for an alternative method. In the absence of agreement on a method that needed approval, the charity could default to the time-based method for the whole building.

Refusal to grant approval wasn’t a matter that could be appealed to the First Tier Tribunal. Disputes over the application of a method and claims that the concession didn’t cater fairly for a given set of circumstances should be referred to the Construction Unit of Expertise.

Negotiable areas

Areas suitable for negotiation were:

  • determining whether a mixed use area was ‘qualifying’ or ‘non-qualifying’ when applying the time based test for parts of a building method or the floor space method
  • determining whether an individual was a ‘qualifying’ or ‘non-qualifying’ person when applying the head count method
  • the length of the representative period.