Is IPT tax recoverable from service charges?

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    Is IPT tax recoverable from service charges?

    I was reading through some tribunal cases and they stated interest is not recoverable from the Lease...so does this mean IPT tax on insurance is NOT recoverable?

    #2
    Yes. Nothing else would make sense.

    Comment


      #3
      Note that it comes out of the service charge by definition based on the statutory definition of service charges. It may be a different part of the service charge, and may have a different reserve fund treatment. It may be referred to as an insurance rent, but is still service charge from the point of view of the legislation.

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        #4
        IPT is charged at 12% and is not the same as VAT which is charged at 20%.

        VAT at 20% is added to the invoice by the supplier if his turnover exceeds £85K p.a ?

        IPT at 12% is charged on insurance cover.

        VAT at 5% is charged for supply to residential building.

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          #5
          I don’t understand the question, please explain your reasoning why interest has anything to do with insurance.

          Comment


            #6
            Lease no interest can be added to the service charges...

            Comment


              #7
              If the lease does not permit interest to be included within the service charge expenditure, it should not be included. That has nothing to do with insurance. IPT is an integral part of the cost of insurance and if the lease requires you to pay insurance, you should pay the full cost, not part of it.

              Comment


                #8
                Some leases do include a clause to say that leaseholder in arrears on payment on annual service charge or annual ground rent may be charged interest at Nat-West Bank's standard interest rate + 4% .

                But this situation is not the same as "recoverable from the service charge account."

                Comment


                  #9
                  Some leases do allow the landlord to borrow money and include interest charges within the service charge expenditure.

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