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Not-for-profit Organisations

Volume 448: debated on Thursday 29 June 2006

To ask the Chancellor of the Exchequer what proposals he has put forward to reduce VAT liability of not-for-profit institutions working in the field of social care, for (a) surgical products, (b) new buildings, (c) refurbishments to buildings and (d) other expenditure. (81079)

Charities, including those that provide social care, benefit from VAT relief on the goods and services that they purchase worth some £200 million per year. These reliefs include a zero rate for medical, sterilising and laboratory equipment purchased by charities for use in the course of medical research, diagnosis or treatment.

VAT is not chargeable on the construction of new buildings used for a relevant charitable purpose, or for the provision of residential care to elderly or disabled people. Similarly, the construction of a hospice for a charity is zero-rated.

No VAT is chargeable on certain adaptations designed to facilitate entry to, or movement within, certain charitable buildings by a disabled person. This includes the installation of lifts, the installation or adaptation of bathrooms and lavatories and the widening of doorways and passageways. Approved alterations to protected buildings that are used for a relevant charitable or communal residential purpose are also zero-rated.

A reduced VAT rate of 5 per cent. is also available for the conversion of a non-residential building into a communal residential building, such as a care home, and for the installation of certain energy-saving materials in certain charitable and residential buildings.