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Residential and commercial mix

17 August 2012
Issue: 4367 / Categories: Tax cases , VAT
Enterprise Inns plc and Unique Pub Properties Ltd v CRC, Upper Tribunal (Tax and Chancery Chamber)

The taxpayer companies owned a large number of public houses operated on a leased-and-tenanted basis which they had opted to tax.

Around half the taxpayers’ income related to rents. The rest arose from wholesale profit on beer and wine sales.

The tenancy agreements included residential areas as well as the commercial ones although no mention was made as to how the rental should be split if at all between the areas.

Until 2008 the taxpayers worked on the basis that 10% of the rent payments received related to residential areas. They accounted for VAT on 90% of the total rent.

The taxpayers subsequently decided all the rent should be subject to VAT.

The matter proceeded to the First-tier Tribunal which found there was a single grant of tenancy that included residential and commercial areas.

The taxpayer companies had opted to tax the...

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