In CLP Holding v Singh and Kaur [2014] EWCA Civ 1103 the seller of a VAT opted property was left with a VAT bill after failing to provide for VAT in the sales contract.

  • The seller failed to inform the purchaser that the property was VAT opted
  • The contract stated the price as £130,000 and did not provide that the price was VAT exclusive
  • There was no warranty in the contract to resolve this kind of problem

The Court of Appeal held that the seller should bear the cost of the VAT due on the sale and not the purchaser.


Surprisingly this is not an uncommon situation as this is the third such case we have heard of in as many years. This should not arise if the seller does a full pre-sale review for tax and so makes its lawyers aware of any potential issues prior to the disposal of the business or any assets. Similar issues can often arise for purchasers who fail to consider VAT and stamp duty land tax should not be overlooked: it applies to the VAT inclusive price.