‘We are all extremely grateful for the support and advice. The £220,000 can now be reallocated to the fit out costs of the community centre (equipment, furniture and kitchen) which we previously had no budget for before’
Andy Shaw, Trustee, St Michael’s Youth Club
Pro bono VAT advice from Unite Students saved St Michael’s Youth Club £220,000 on their new community centre project.
St Michael's Youth Club goal is to equip the young people with skills for life within a positive and nurturing community. They host a number of weekly community initiatives for disadvantaged young people in the area by running activities for education, health and fitness, to enable young people to build positive relationships, have fun and enjoy themselves.
The charity use the valuable time they have with the young people to encourage them to get involved in things they wouldn't normally have the opportunity to do. They focus on the self-worth of the young people and the future role that they will play in the community whilst always reminding them of their potentials and opportunities.
St Michael’s are based in an old church in Fulham, London, which is no longer financially viable for the charity to use. They are applying for planning permission to demolish the building and construct a new community centre and a number of flats. The charity plan to sell some of the flats to raise money for the project and retain the remainder to provide a rental income for their work.
The charity approached LandAid with a request for property advice on the VAT implications of a mixed-use scheme, where the community centre was for charitable use (which is exempt from VAT) and residential element of the project (which is not). And for advice on whether as a charity they could reclaim the VAT on the professional fees of team working on the project.
Unite Students were able to advise St Michael’s on how they could obtain a certificate of ‘Relevant Charitable Purpose’ (RCP) which means the contractor would not charge VAT on the whole project. They also advised the charity to appoint a contractor who would allow elements of the professional fees to be billed to them, rather than the Trustees of the charity. As a recognised RCP project the contractor should not charge VAT on related professional services (such as architects and structural engineers).
As a result of this advice St Michael’s can now use the money they had originally put aside to pay VAT towards improving the quality of the building for the benefit of the young people.