HMRC is currently undertaking a campaign specifically targeted at not for profit sports clubs that may have incorrectly issued certificates in order to obtain zero-rated construction services for new buildings and annexes used for a “relevant charitable purpose”. This is a complex area of VAT.

The construction of a new building or annex intended to be used solely for a “relevant charitable purpose” can be zero-rated if the charity provides their developer with an appropriate certificate before the supply is made. The definition of a “relevant charitable purpose” is otherwise than in the course or furtherance of business or as a village hall or similar.

HMRC has focused on certain clubs, particularly (but not limited to) football, rugby and cricket clubs that have used the funding to construct buildings and annexes and requested information relating to the building projects.

The sole purpose of this exercise by HMRC has been to check that the buildings would be used for a “relevant charitable purpose”.

HMRC has since issued numerous assessments and penalties to sports clubs which have, in HMRC’s opinion, incorrectly used the certificates.

Winchester Bourne offers a full range of support services and expertise in VAT schemes and their correct administration and implementation. 

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