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Early termination and compensation payments

Revenue and Customs Brief 2/2022: VAT early termination fees and compensation payments sets out HMRC’s change of policy on the VAT treatment of early termination fees and similar payments from 1 April 2022. HMRC now considers that charges made by businesses to their customers to withdraw early from agreements to supply goods or services are further payments for a supply and potentially liable for VAT.

Source: taxjournal.com

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