Market leading insight for tax experts
View online issue

VAT on compensation payments: clarity at last?

Speed read
HMRC has finally published its revised guidance on VAT on early termination and compensation payments. From 1 April 2022, there will be fewer situations where HMRC accepts that such payments are outside the scope of VAT. However, HMRC did clarify that dilapidation payments are generally not subject to VAT. Penalties which are punitive and designed to deter termination, should be outside the scope of VAT, but the recent CJEU case of Apcoa (albeit not binding on the UK courts) suggests that contractual penalties may be taxable.

If you or your firm subscribes to, please click the login box below:

If you do not subscribe but are a registered user, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this article in full.
Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.