Decision details

The Council is entering into a conditional development agreement (PDA) for the redevelopment and extension of the Brent Cross Shopping Centre. The PDA contains a general charging clause in respect of VAT to the effect that any sums paid, or other consideration provided, under the Agreement for the supply of goods and services, are exclusive of VAT chargeable in respect of the payment or other consideration given and that VAT should be paid on any supply.

As part of this agreement, the Council must ensure that it has made a valid option to tax in relation to the Council’s interest in the Centre, with effect from a date on or before completion of the Surrender, and the grant of the new headlease. The proposed VAT provision also includes an obligation on the Landlord to seek any necessary permission from HMRC.

The Council has not yet opted to tax its interest in the property. Once the Council opts to tax their interest in the Centre, all supplies made in relation to this interest will normally be standard rated. In addition, the Council would be able to recover any VAT incurred in making those supplies.