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With effect from 1 October 2012 changes were made to the legislation (Group 6 of Schedule 8 of the Value Added Tax Act 1994).

»Ê¹ÚÌåÓýapp purpose of these changes was to remove the anomaly whereby the approved alteration of protected building was zero-rated but their repair and maintenance (and the alteration of other types of building) was standard-rated. »Ê¹ÚÌåÓýapp VAT treatment of approved alteration to protected buildings has been a source of major confusion, resulting in a high volume of taxpayer query and frequent error. »Ê¹ÚÌåÓýappse changes remove the need to try to distinguish between alteration and repair or maintenance, and remove the incentive to alter, rather than repair, listed buildings.

»Ê¹ÚÌåÓýapp changes to the legislation

Group 6 of the Value Added Tax Act 1994 has been amended to remove zero-rating

1] from approved alterations as follows:

Item 2: the supply in the course of an approved alteration of a protected building, of any services other than the services of an architect, surveyor or any person acting as consultant or in a supervisory capacity; and

Item 3: »Ê¹ÚÌåÓýapp supply of building materials to a person to whom the supplier is supplying services within item 2 of this Group which include the incorporation of the building materials into the building (or its site) in question;

and;

2] from the first grant of a major interest in a ‘substantially reconstructed building� in those situations where the zero-rating relied on 3/5ths of the work being undertaken consisted of approved alterations.