Surplus property holdings can create VAT issues for businesses and cause a substantial VAT cost: more recent case law suggests that the judgment in Royal & Sun Alliance Insurance Group Plc [2003] STC 832 should be revisited, and having no firm intention might not be a barrier to deducting input tax on headlease rents; the Tribunal’s decision in British Eventing Ltd TC00664 could lead to unintended consequences and additional costs when assigning a lease; and, privity of contract can lead to an input tax cost to businesses many years after exiting from a particular property.
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