Etienne Wong (Old Square Tax Chamber) considers whether the Longridge judgment on ‘relevant charitable purpose’ is the final word on what ‘business’ means for VAT.
A charity is planning to put up a new building. A trustee hears that if they could certify that the new building will be used solely for a ‘relevant charitable purpose’ no VAT would be payable on the construction services. Google tells her that VATA 1994 Sch 8 Group 5 note 6 says:
‘Use for a relevant charitable purpose means use by a charity in either or both the following ways namely:
(a) otherwise than in the course or furtherance of a business;
(b) as a village hall...’
The charity will not be using the building as a village hall (or similar); it will be using it to run educational courses in line with its charitable objectives....
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Etienne Wong (Old Square Tax Chamber) considers whether the Longridge judgment on ‘relevant charitable purpose’ is the final word on what ‘business’ means for VAT.
A charity is planning to put up a new building. A trustee hears that if they could certify that the new building will be used solely for a ‘relevant charitable purpose’ no VAT would be payable on the construction services. Google tells her that VATA 1994 Sch 8 Group 5 note 6 says:
‘Use for a relevant charitable purpose means use by a charity in either or both the following ways namely:
(a) otherwise than in the course or furtherance of a business;
(b) as a village hall...’
The charity will not be using the building as a village hall (or similar); it will be using it to run educational courses in line with its charitable objectives....
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
.jpg?sfvrsn=335a554c_0 "300 x 250 (MPU)")