HMRC have, disappointingly, confirmed that the proposed VAT changes to remove zero rating for approved alterations to listed buildings, is to be implemented with effect from 1 October 2012. The transitional period within which zero rating will continue to apply has however been extended.
This means that projects which have applied for listed building consent, or have a written contract with a builder in place, before 21 March 2012, will benefit from zero rating up to 30 September 2015. It was initially proposed that transitional arrangements may only apply until March 2013, therefore this may be a small piece of good news for some property developers.
The zero rating for the first grant of a major interest in a substantially reconstructed listed building has been retained but only for those buildings reconstructed from a shell.
If you would like to discuss the impact of these changes on specific current and future projects we would be more than happy to hear from you. Please contact Iain Masterton in the Chiene + Tait VAT Team on 0131 558 5800 or email email@example.com