Lobbying Pays Off On VAT And Rent Reviews Legislation

A proposed amendment to the Government’s Finance Bill has clarified the situation regarding VAT and rent reviews following intensive industry lobbying involving the NFU.

The NFU has worked hard over the past six months within the Tenancy Reform Industry Group (TRIG) to secure clarification on the Mason vs Boscawen court case which affected rents under the Agricultural Holdings Act 1986.

The concern of the industry was that following the Mason vs Boscawen court case there was a risk that the ability of tenants and landlords to have a statutory rent review could have been frustrated unintentionally. The amendment to the legislation proposed in the Finance Bill has been confirmed in correspondence received from HMRC.

The proposed amendment means that any changes in the level of VAT set by the Treasury (as expected in January 2010) or in the apportionment between the commercial and residential element of the farm have been clarified to not retrigger the three-year rent review cycle.

NFU Head of Tax Michael Parker said: “This is excellent news and is a successful result for the industry following concerted lobbying through the spring of 2009. This clarification will give certainty and confidence to tenant farmers that rents can be adjusted as appropriate according to market conditions.”