The landlord had opted to charge VAT on part of the rent. The tenant fell into arrears and now challenged a notice to quit which included the VAT. The court was asked what constituted ‘rent’ for the purposes of a demand for rent founding a notice to quit an agricultural tenancy.
Held: The notice had been valid. A submission that the statutory rent review regime is inviolate and incapable of variation by the parties is not correct. There could be no argument that when the Act was passed, Parliament anticipated the VAT regime, and ‘The VAT is simply part of the global price for occupation of the land, and its fiscal consequences do not affect its character. So far as the tenant is concerned, he can deduct the VAT element of the rent from his own output tax at the end of the quarter; and he can deduct the rest of the rent from his profits at the end of the year before paying his income tax. This is simply a difference in the machinery for accounting for tax. It does not, in my judgment, mean that different characteristics should be attributed to different parts of the rent.’
Lewison J
[2008] EWHC 3100 (Ch), [2009] NPC 5, [2009] BVC 75, [2009] 2 EG 80 (CS), [2009] BTC 5075, [2009] STI 185, [2009] STC 624, [2009] 1 All ER 1006
Bailii
Agricultural Holdings Act 1986 Sch 2, Agricultural Holdings (Forms of Notice to Pay or to Remedy) Regulations 1984, Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006
England and Wales
Citing:
Cited – Pickard v Bishop 1975
Because of the draconian effect of a valid notice to quit relying on one of these cases strict compliance with the statutory provisions is required, and the preliminary notice must be accurate. . .
Cited – Dallhold Estates (UK) Pty Ltd (In Administration) v Lindsey Trading Props Inc CA 15-Dec-1993
The landlord is to provide a service address if an agricultural tenancy includes a dwelling, but relief from the consequences of non compliance with section 48(1) may be obtained by service of an appropriate notice. Immaterial misdescriptions or . .
Cited – Dickinson v Boucher 1984
A notice to pay rent which demands a greater sum than that which is actually due will be invalid. The action for recovery of possession is based on the failure to comply with the demand, not the fact of arrears. The purpose of the notice is to tell . .
Cited – Hostgilt Limited v Megahart Limited 4-Dec-1998
VAT operates with a system of inputs and outputs to bring down the burden of purchase tax. VAT is a tax on a retailer’s turnover, which purchase tax was not. In a concluded contract the question of whether a sum includes VAT is a matter of . .
Cited – Commission v United Kingdom ECJ 21-Jun-1988
Europa An action by the Commission pursuant to Article 169 of the Treaty against a Member State for failure to fulfil its obligations, the bringing of which is a matter for the Commission in its entire . .
Cited – Property Holding Co Ltd v Clark CA 1948
Evershed LJ discussed the meaning of ‘rent’: ‘prima facie the rent is the monetary compensation payable by the tenant in consideration for the grant, however it be described or allocated. Alternatively, it may be described . . as the contractual . .
Cited – Foreign Property APS v Secretary of State for Health 2004
The lease contained special clauses relating to the tenant’s liability to pay VAT at a time before the landlord had supplied evidence of an election to waive the exemption.
Held: Laws LJ said: ‘I acknowledge that the respondent must point to a . .
Cited – Sidney Trading Co Ltd v Finsbury Borough Council 1952
Lord Goddard CJ said: ‘the test for deciding what is ‘rent’ for the purpose of the Rent Restrictions Acts is to ask: what is the total monetary payment to be made by the tenant to the landlord?’ . .
Cited – Scottish and Newcastle Plc v Raguz CA 24-Jul-2003
Leases had been granted. They had been assigned to the defendant who had assigned them again. The last assignee became insolvent and statutory demands were served on the claimant under the 1995 Act for rent. The claimant paid the sums due and now . .
Cited – Wynn Realisation Ltd v Vogue Holdings Inc CA 24-Mar-1999
Appeal of Wynn Realisations Ltd from an order dismissing the claim of Wynn to 107,250 pounds as being part of the price due but unpaid on the sale of certain land by Wynn to the defendant Vogue Holdings Incorporated. The sum represented the VAT . .
Cited – United Scientific Holdings v Burnley Borough Council HL 1978
The House was asked whether a failure by a lessor to keep strictly to the timetable laid down in a rent review clause in a lease necessarily deprived the lessor of the benefit of the rent review.
Held: A stipulation as to time in an option . .
Cited – J W Childers Trustees v Anker 1996
. .
Cited – Moll v MacGregor 1990
(Scottish Land Court) The parties had agreed a rent for an agricultural holding which was to vary annually in accordance with the Retail Price Index.
Held: ‘The main purposes of the 1949 Act were to provide for security of tenure, compensation . .
Cited – Plumb Bros v Dolmac (Agriculture) Ltd CA 1984
As part of an agreement made between the landlord and tenant of an agricultural holding, the landlord agreed not to seek an increase in the rent for five years. Within the five year period the landlord demanded arbitration in accordance with the . .
Lists of cited by and citing cases may be incomplete.
Landlord and Tenant, VAT
Updated: 01 November 2021; Ref: scu.278967