Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

VAT Construction

From
HM Revenue & Customs
Updated
, see all updates

Relevant charitable purpose concession (pre-1 July 2010 only): choosing a method

 
 

Background

A charity could choose the method that most favoured its own circumstances, subject to approval where applicable.

There were four methods:

  • time-based (complete building)
  • time-based (part building)
  • headcount-based (complete building)
  • floor space-based (complete building).

Only the time-based method could be used for part of a building.

Non-qualifying use of a building could be restricted to an identifiable area of the building; or could be carried on generally throughout the building, either at the same time as the qualifying use or at different times to it.

It may be helpful to use the procedure tables later in this guidance in deciding which concession method should be used.

Note: For the purposes of this concession, use of a building or part of a building by fee-paying postgraduate students solely involved in non-business research projects could be treated as qualifying use of the building. This applied to all concession methods. In all other circumstances, the use of a building or part of a building by fee-paying postgraduate students was non-qualifying use. 

Where non-qualifying use was carried out in an identifiable area

Where non-qualifying activities would be carried on exclusively in an identifiable part of the building, the following procedure was recommended:

Step Action
   
Step 1 Apply concession based on floor space.

If 90 per cent or more of the floor space of the entire building is to be used for a qualifying purpose, the non-qualifying use can be ignored.

If not, go to (concession based on time) or (concession based on headcount).
  | | Step 2A | Apply concession based on time (VCONST19300).

If the entire building will be used solely for a qualifying purpose for more than 90 per cent of the total time the building is available for use, the non-qualifying use can be ignored.

If not, go to (concession based on headcount) or on to .
  | | Step 2B | Apply concession based on headcount (VCONST19500).

If the entire building will be used solely for a qualifying purpose by 90 per cent or more of the people using the building, the non-qualifying use can be ignored.

If not, go to (concession based on time) or on to .
  | | Step 3 | Apply concession based on time (part building) (VCONST19400).

If the part of the building in question will be used solely for a qualifying purpose for more than 90 per cent of the total time that that part of the building is available for use, the non-qualifying use can be ignored.

If not, go to .
  | | Step 4 | According to Note 10 to Group 5 of Schedule 8 to the Value Added Tax Act 1994, an apportionment is required (VCONST17000).
  |

 

Where non-qualifying use wasn’t carried out in an identifiable area

Where non-qualifying activities wouldn’t be carried on exclusively in an identifiable part of the building but were intended to be carried on generally throughout the building, either at the same time as the qualifying use or at different times to it, the following procedure was recommended:

Step Action
   
Step 1 Apply concession based on time (VCONST19300).

If the entire building will be used solely for a qualifying purpose for more than 90 per cent of the total time the building is available for use, the non-qualifying use can be ignored.

If not, go to .
  | | Step 2 | Apply concession based on headcount (VCONST19500).

If the entire building will be used solely for a qualifying purpose by 90 per cent or more of the people using the building, the non-qualifying use can be ignored.

If not, go to .
  | | Step 3 | The building has no qualifying purpose and won’t qualify for relief.

No apportionment is possible.
  |