We have an unusual situation and some guidance would be appreciated. Claimant has the tenancy of a public house – it’s a composite property with both business rates and c/tax being charged. They have now been made bankrupt and are receiving IS. They have applied for HB and supplied their tenancy agreement which confirms that the ‘tenancy’ is for the whole of the premises and is for a fixed sum per annum with add ons for various business expenses e.g. licensing fees and insurance.
The weekly invoices they have provided break the’rent’ down into elements, some of which attract VAT and some that are exempt from tax, which suggests that the VAT elements are for the commercial part of the property – unfortunately this is the larger proportion of the rent.
I’ve allowed the claim on the element of rent which is not VATable? but have disallowed the remainder as it is for the commercial element. The claimant disagrees with this as they have no other accommodation and are waiting for the brewery to evict them to be rehoused by our housing department.
Is there one simple reg I could quote in what is likely to be an appeal, or will I have to quote regs 8 and 10 and thereby deduce that the payments for the commercial element do not constitute rent?… or does anyone disagree?
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