A charity can claim zero rate VAT on a newly constructed building if it can certify that it will be used for a relevant charitable purpose. This applies to the ten years after construction. If the building undergoes a change of use in that period, VAT may have to be paid back.
Certain charities may be affected as a result of the pandemic. A laboratory may have been requisitioned for analysing Covid tests. Accommodation at a university may have been requisitioned for NHS staff. This problem has been recognised by the Charity Tax Group and HMRC are taking a case by case approach.
If you are not sure about how you stand regarding a change of use of a charity building Contact Chris for an informal discussion.