Value Added Tax
Dilaps and VAT
If the landlord carries out work to rectify wants of repair by the tenant, then whether VAT should be added to this cost would usually be stated in the lease. VAT is generally not applicable on a monetary payment to settle a claim for damages. However, if the landlord cannot recover the cost of VAT, it would then become part of the constituent elements of the claim for damages, although VAT would not be levied on the amount being paid.