Charity annexe raises existential VAT questions

Charities with intentions to construct annexes tend to meet the publication of a new case on the subject with a mixture of fascination and horror. The sums of VAT that can be saved (if the charitable use is of the correct kind) are significant. The question of whether the construction project is of the right kind is semi-philosophical (or theological). Rather like considering what constitutes the human spirit, the case-reader is required to ask himself whether the essence of the construction is that it is an ‘annexe’, an ‘extension’, both of these, or neither.

The most recent case to enter the list is that of Roman Catholic Diocese of Westminster (TC06692) which was successful in its case that the construction was of an annexe. This allowed the job to be zero rated. Had it been an extension it would have been standard rated.