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HMRC internal manual

VAT Construction

Changing the use of certificated buildings - buildings completed before 1 March 2011: who accounts for the charge?

The person who received the zero-rated supply accounts for the charge.

Where more than one person in the supply chain has received relevant zero-rated supplies, the person who last received a relevant zero-rated supply should account for the charge.


A builder zero-rates to Charity A the construction of a building intended to be used solely for a relevant charitable purpose. The charity later sells the building to Charity B, who also intends to use the building solely for a relevant charitable purpose. Assuming the sale isn’t a transfer of a going concern, it is zero-rated as the first grant of a major interest in a qualifying building by a person constructing it. Charity B later changes the use of the building. Although there are two relevant zero-rated supplies, only Charity B accounts for the charge.