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HMRC internal manual

VAT Construction

Changing the use or disposing of certificated buildings - buildings completed on or after 1 March 2011: changes

Instead of having two adjustment mechanisms (each with its own rules on how to calculate and apply a tax charge) to apply to the two sets of circumstances where a ‘change in use’ occurs as set out in VCONST20000, there is now a single adjustment mechanism to be applied in all circumstances where use changes or where the building is disposed of.

The VAT due on the tax charge calculated by this single adjustment mechanism is equivalent to the VAT that would have been charged on the original supply (supplies) had they not qualified for the zero rate, adjusted to reflect:

  • the proportion of the building that is affected by the change in use (or disposal)


  • the number of complete months that the building had been used solely for a qualifying purpose prior to the change in use (or disposal).

The tax charge calculated is then treated as a taxable self-supply. A self-supply is a deemed supply to and by the person concerned.