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HMRC internal manual

VAT Construction

Relevant charitable purpose concession (pre-1 July 2010 only): time-based method (entire building)

The method based on time could be applied to the entire building without permission from us.

Step Action
## Step 1 {#IDA5BJJG} Select a representative period.
Note: The representative period over which the use is measured isn’t prescribed and any reasonable representative period may be used.    
  ## Step 2 {#IDAOGJJG} Determine the amount of time that the building is intended to be used solely for a relevant charitable purpose during that representative period.
  ## Step 3 {#IDAHZIJG} Determine the total amount of time that the building is available for use during that representative period.
Note: The ‘total time the building is available for use’ is the total opening hours of the building during the representative period.    
  ## Step 4 {#IDA4YIJG} Divide the amount of time determined at Step 2 by the amount of time determined at Step 3 and multiply by 100.
  ## Step 5 {#IDAP2IJG} If percentage calculated at Step 4 is greater than 90 per cent, any non-qualifying use can be ignored.

Note: Where the building was used for both qualifying and non-qualifying activities at the same time then that period of time couldn’t be regarded as qualifying use (VCONST19500).

When applying the time-based method to an entire building, it wasn’t acceptable to consider the use of the building by reference to the total staff hours spent on qualifying and non-qualifying activity within the building. This was because the method only considered the time a building was used solely for a qualifying purpose.


A charity is constructing a hall. Every Friday evening, the hall will be let to another organisation for two hours. The rest of the time the hall is available for use (36 hours) it will be used by the charity for a relevant charitable purpose.

The percentage qualifying use is 36 divided by 38 - that is, 94.7 per cent. The building will qualify under the concession using this method and a certificate can be issued.