In September 2020, following two Court of Justice cases, referred to below, HMRC published controversial and ill-thought through guidance changing its long-standing policy on the VAT treatment of early termination fees and compensation payments. Following many dissatisfied responses, HMRC agreed in January 2021 to withdraw and replace this guidance. The replacement guidance has finally arrived, Revenue Brief 2/2022, and HMRC’s revised position is much closer to the impact of these two Court of Justice cases, without the wider ramifications.
Source DLA Piper
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