VAT Concern - Changing the Use in a Building
Centurion delivered a VAT Update session for Constructing Excellence Wales today to highlight the issues that will arise when the use in a building – which had originally achieved a Zero VAT treatment on the build costs (on the basis of its planned use) – changes as a result of the issues arising from the Covid 19 outbreak.
This is particularly acute in the education area as blocks of student accommodation start to be used in a variety of other ways – either as serviced flats, holiday lets, key workers accommodation or supplied to councils for other accommodation uses. HMRC themselves recognise the potential VAT costs that will arise in these “change of use” situations and have updated their VAT notice 708 on Buildings and Construction to add the following paragraph:
“If the use of a certificated building changes or the building is disposed of, as a direct result of coronavirus (COVID-19), and a self-supply charge is due, you should contact HMRC through your customer compliance manager or the charities compliance team by email:
VAT issues arising from any change in use of a certificated building where Zero rating had been originally secured can be significant and therefore we would encourage any organisation affected by such potential issues to seek the appropriate VAT advice on the matter to ensure they fully understand the potential impact.
Change of use issues on property is an area that certainly can fall into the “VAT gets complicated” part of life – that’s where Centurion can help, so don’t hesitate to get in touch with your usual Centurion specialist or email on firstname.lastname@example.org if this is a concern.
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