What is the meaning of the VAT agreement in the JCT form of building contract?
The Supplemental VAT agreement to the JCT standard form of building contract clarifies the contractor’s obligations with reference to the apportionment of VAT on a construction project. There is a choice of clauses depending on the project type. The choice is recorded in the contract appendix. If there are likely to be mixed rates of VAT on a development and it is desired that the contractor should make an apportionment for each stage payment eg a mixed use type development then the appendix should record that Clause 1A does not apply. If there is likely to be a single rate of VAT on a development and it is desired that the contractor should make an apportionment for each stage payment eg a commercial office development then the appendix should record that Clause 1A does apply.
