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HMRC internal manual

VAT Construction

Changing the use of certificated buildings - buildings completed before 1 March 2011: taxable charge - change of own use

Change of own use creates a self-supply

If a building (or part of a building) is used for a purpose that is no longer solely for a relevant residential or relevant charitable purpose, the person who received the relevant zero-rating is required to account for VAT on a self-supply charge.

The relevant provisions were the Value Added Tax Act 1994, Schedule 10, Paragraphs 37(1) to 37(2) prior to The Value Added Tax (Buildings and Land) Order 2011 (SI86/2011).

The value of the charge

The amount due is the amount of VAT that would originally have been charged if the supply hadn’t been zero-rated, adjusted on a pro rata basis to reflect the amount of time that qualifying use has taken place. Details can be found in Notice 708 Buildings and construction.

Any change in the VAT rate is ignored - the amount of VAT due is calculated by reference only to the amount of VAT that would originally have been charged.

The relevant provision was the Value Added Tax Act 1994, Schedule 10, Paragraph 37(5) prior to The Value Added Tax (Buildings and Land) Order 2011 (SI86/2011).