VCS v HM Revenue & Customs

give_them_FA

You are right- the industry isn't very legal anyway and won't let a little thing like a Court ruling stand in the way of sending out unenforceable invoices. But- trying to enforce it in Court! The few that have tried, stand now to be very embarrassed..... I know someone who MIGHT have to refund a lot of dosh.....

AlexisV

The issue is landowners. Supermarkets, for example, need to get their lawyers onto this issue. There is also the possibility that they could be open to a VAT bill themselves where supermarkets do not actually own land.

taffy056

So does that mean that anyone who is VAT registered and paid one of these invoices can claim 20% back through the revenue? what about these companies who use the vat number of moto (cp plus) in their invoices?

HO87

A solid question. And will PPC's be prepared to provide VAT invoices for the self-employed and their corporate victims? I know that in recent months some PPC's have flatly refused to provide VAT invoices but they would now seem to be on a hiding to nothing if they try that again.

nicechap

I'm nowhere near as knowledgeable as you peeps, but if the PPC would now have to "manage" the car park rather than just parking infringements, does that mean if there is a pot hole which causes damage to my suspension or tyres I can sue the PPC? Or if they do not provide wide enough bays so as to stop adjacent cars doors from damaging my paintwork I can sue them for the repair & respray?

wriggly

taffy056 wrote: »

So does that mean that anyone who is VAT registered and paid one of these invoices can claim 20% back through the revenue? what about these companies who use the vat number of moto (cp plus) in their invoices?

No, it does not mean that.

The contract between the landowner and the PPC allowed the PPC to keep all money paid by the victims.

The judge determined that in effect the victim paid the landowner (through their agent, the PPC), and the landowner then paid the agent a fee which happened to equal this payment. It was this second transaction, between the landowner and the PPC, which is subject to VAT, so it is the landowner who could claim the VAT back.

give_them_FA

Creates an interesting conundrum. Some companies try to get around the "penalty" block, by wording their notices to the effect that the charge is NOT damages but is a FEE. If it's the latter- a payment for the provision of a service- then do they charge VAT on it? They should- it is only "Damages" which are exempt from VAT. But if they say it is DAMAGES, then unless they can show they have suffered actual damage, then it is plainly a PENALTY.

And either way they cannot take Court action to recover it, in their own name! Hmmm.....

trisontana

I thought that some PPCs don't charge the landowner/supermarket any fee, but rely on the "parking charge notices" to make money on the deal. This is certainly true on "self ticketing" set-ups where, not only no payment is required from the landowner, but the PPC actually pays a £10 bounty for each ticket left on a car.

How is that going to affect the VAT situation?

peter_the_piper

trisontana wrote: »

I thought that some PPCs don't charge the landowner/supermarket any fee, but rely on the "parking charge notices" to make money on the deal. This is certainly true on "self ticketing" set-ups where, not only no payment is required from the landowner, but the PPC actually pays a £10 bounty for each ticket left on a car.

How is that going to affect the VAT situation?

Would that not be 2 vat amounts (assuming oth parties are over the vat threshold) for the £10 from the landowner and for the balance from the ppc, again assuming the ppc has the correct type of contract to enablem to apply an invoice. Talk about tied up in knots.

HO87

Wriggly is correct - insofar as the judgment in relation to VCS was concerned. The tribunal found that because the contract VCS had with the landowners/agent did not allow them to make any offer of parking to the motorist the only contract of relevance was that that existed between the landowners and VCS. Summarising, in that contract VCS agreed to enforce certain parking conditions and collect the charges for breaches of the contract. These payments were due to the landowners as recompense for trespass/breach of contract but because they were retained by VCS they became a ratable consideration.

This creates something of a black hole however. It seems to me that PPC's have two choices. They substantially redraft their contracts with landowners so that they can have delegated to them sufficient interest in the land as to be able to offer a substantive contract with those who seek to park in the car parks and can therefore intiate proceedings on their own part or the simply act as agents of landowners and sue in their name.

The only means by which I can see the average PPC being delegated or actually gathering sufficient interest in the land to themselves would be by means of a lease or some form of licence. One could envisage that this would not be a terribly satisfactory or desirable or even feasible state of affairs at some locations.

What is clear is that the mere presence of signs is no basis for the necessary offer and acceptance of a contract to park and so in the case of self-ticketing operations, it seems to me, the only service that the PPC offers is that of debt collection. The debt they are pursuing is that due to the landowner by way of damages. It is not until such time as that money is collected that the PPC has earned its fee and, when retained, becomes their payment for the service. I would therefore suggest that PPC's operating this scheme should be registering as debt collectors under the terms of the Consumer Credit Act.

Registering for a CCA licence would set another rake of legal hurdles for PPC's to overcome in order to satisfy the OFT's "fit and proper" test. Applications take time and you cannot operate as a debt collector before you have a licence in your hand. For these reasons the self-ticketing ofering may not be destined to last.

If PPC's are to be granted licences/leases then they will become liable from a H & S point of view - just for openers - and if you were operating a busy out-of-city retail centre car park your liability may be such that the only way in which the risks can be managed without substantially exposing your company will be for the car parks to be manned.

The other killer question is how many supermarkets/retail park operators actually own their car parks and do not actually lease them? How many will be able to legally provide sufficient interest to a PPC for them to operate legally?

How many PPC's - whether or not they are BPA AOS members - will make any attempt to address the post-VCS world?