VAT is likely to be a significant cost to a church embarking on a building project.
I have been involved in many such projects, costing from £1,000 to £10million. I have been delighted to identify substantial savings, either to reduce the project cost, or to release funds into other areas of the church’s ministry.
There are lots of variables, which will have an impact on the VA T outcome of a project:
- Is the church constructing a new building?
- Is the church purchasing an existing building?
- Is the church undertaking development or extension of its building?
- Will the extension qualify as a ‘charitable annex?’
- Will the building be used solely for church activities, e.g: Sunday services, children’s and youth work, prayer meetings.
- Will there be any business activity, e.g: coffee shop, third party lettings; or any other activity that generates income?
Some building projects require a Special Purpose Vehicle (SPV) company to undertake the building work.