Community buildings such as village halls and community centres are owned and managed by volunteer management committees. Most are recreational charities whose object is to provide a facility for the use of the whole community. The community building will be hired out in part or in its entirety to other charities, local voluntary organisations, community groups and individuals at rates that are lower than normal commercial rates.
The community building management committee may seek to generate further income from their assets by considering commercial activity. Care needs to be taken when structuring commercial activities so that rate relief is not jeopardised and trading exemptions are not breached. Charities wishing to construct new buildings are entitled to VAT relief, but this may also be jeopardised by providing commercial activity.
