In Mrs Janine Ingram v Church Commissioners for England [2015] UKUT 0495(LC) the Upper Tribunal Judge agreed that VAT charged on services provided to residential landlords by a managing agent was properly charged and could be passed on to the tenants.
The tenant, Mrs Ingram, had misunderstood the scope and purpose of the concession included in VAT Notice 48 relating to service charges.
Case summary:
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A landlord contracted with a managing agent to provide staff and services in connection with the maintenance of his property. The managing agent charged VAT on its services to the landlord who passed the whole cost, including VAT, to the tenants.
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The tenant argued that, by concession, the managing agent should not have charged VAT as the costs were in the nature of service charges. The landlord should therefore not have passed the VAT charge onto the tenants.
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The judge confirmed that the concession would exempt from VAT mandatory service charges which were supplied directly to tenants by residential management companies, and not these services which were supplied by a managing agent to the landlord. The managing agent was correct to charge VAT on its services, and the landlord was entitled to pass the charge onto the tenant.
Useful links:
Case reference: Mrs Janine Ingram v Church Commissioners for England [2015] UKUT 0495(LC)
Extra Statutory Concession: Paragraph 3.18 of VAT notice 48
