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17 March 2009
Issue: 4198 / Categories: Tax cases , VAT
Mason v Boscawen, Chancery Division, 18 December 2008

The claimant was the tenant of a farm owned by the defendant landlord.

The tenancy had been granted in 1988 and was governed by the Agricultural Holdings Act 1986. The tenant paid an annual rent which fell within VATA 1994 as an exempt supply.

The landlord later decided to waive the exemption so that he could recover as input VAT any VAT paid in making the supply of the land. He therefore added VAT to the rent.

The tenant refused to pay the VAT so the landlord served him notice to quit.

The tenant demanded arbitration. The questions before the court were:

  • whether a notice to pay rent under AHA 1986 Sch 3 Case D which included VAT was valid; and
  • whether the notice to pay rent was clear.

The court ruled that the modern meaning of rent was the total amount in consideration...

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