…or purgatory if you are an optimist. In our last update (here) we mentioned that:
- HMRC were reconsidering whether guidance under RCB12/20 would apply to bring dilapidations payments into the scope of VAT;
- RCB12/20 – which brings various contractual compensation payments into VAT – would not have retrospective effect but would apply from some future date; and
- HMRC were targeting 1 March for RCB12/20 to take effect.
1 March has passed without comment from HMRC, and no further updates to RCB12/20 have been announced. Therefore – for now - the VAT treatment of contractual compensation payments remains unchanged and genuine dilapidations remain – for the time being – outside of VAT.
We will provide further updates when they become available.