HMRC have published Revenue and Customs Brief 2 (2022) ‘VAT early termination fees and compensation payments’. This details their revised policy effective from 1 April 2022 and clarifies the VAT treatment of dilapidations.
The brief explains that HMRC is introducing a revised policy on early termination payments and compensation payments. The brief:
- replaces Revenue and Customs Brief 12 (2020): VAT early termination fees and compensation payments
- gives an update on the VAT treatment of early termination, compensation and similar payments
- advises businesses that adopted the treatment outlined in Brief 12 (2020) on what action they should take
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