Can Churches get VAT relief on their building work?
Generally, building work undertaken by Contractors are standard-rated for the purposes of VAT. However, some specific items of work can sometimes be charged at a reduced rate of 5%, and in some cases, even at 0%. This can be a great saving for our Church Clients, especially where budgets are limited.
The agreement of the application of VAT must be established by the Contractor, as it is their responsibility to apply and reclaim VAT, if applicable. However, the following types of construction work may be eligible for a reduced or zero rating for VAT.
The construction of certain buildings, used by charities, can also qualify for zero-rating if they're used only for a 'relevant charitable purpose' - see HMRC Notice 708, Buildings and Construction for the latest information and guidance.
Installation of Energy Saving Materials
The supply and installation of some energy saving materials may be charged with a reduced rate for VAT, for example, solar photovoltaic panels. To see which materials will attract the reduced rate, visit the HMRC website. Please note, you must be installing them on to a 'qualifying' building for the costs to be eligible for the reduced rates.
Installing Grant Funded Heating Equipment
The installation of some heating and security systems may also attract a reduced rate for VAT, if the equipment is being installed to homes that they deemed eligible. Please visit the latest guidance from HMRC to see if your works can qualify, including the HMRC Notice 708/6, Energy Saving Materials.
Please note, the advice above is given in good faith, and is only to be regarded as a signpost to some of the possible, other sources of information on the matter of VAT. The Practice accepts no liability as to the quality or accuracy of information offered herein, and it is up to the reader to ensure that the advice they rely on is based on sound advice from an authorised author, company or Government organisation.