HMRC’s VAT Brewers’ Society Agreement terminated on 1 June 2018. HMRC have not published any formal guidance following the withdrawal.

Under the agreement, brewers were permitted to recover an agreed percentage of input VAT in respect of tied tenanted licensed houses containing a residential element.

The agreed percentage was widely accepted as being 90%, with a corresponding 10% VAT restriction. Although not officially part of the Brewers’ Society Agreement, the 90:10 split is typically accepted as also applying to the VAT liability of any rental or sale income from such properties (see Sale of tenanted pub case as an example)

VAT Notice 700/57 previously contained details of the Brewers’ Society Agreement. This has been updated to note that “A business who is currently using this agreement should review their method to ensure that it is still fair and reasonable.” HMRC is not planning to add further guidance.

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