Just Wondering.... VAT on PPCs 30 May 2012 at 11:37AM in Parking Tickets, Fines & Parking 6 replies 589 views

benham3160

Hi all, this doesn't affect me in any way, but a sudden thought has just struck me.

If a PPC placed a 'speculative invoice' on a car, and that was paid, does this mean that if it was a business vehicle, and paid by a VAT registered business, that business would be allowed to reclaim the VAT from that payment?

Regards,
Andy

JasonLVC

Up until recently, parking fines or penalties were generally outside the scope of VAT as the 'fine' was seen as compensation for breach of contract.

Following the VCS case, it was established that the PPC did not have sufficient right over the private land to claim 'trespass' and thus damages.

HMRC now take the view that a driver enters private land and the signage warning of penalties forms the basis of a contract so a driver who breaches the contract (by parking there) receives a taxable service of the PPC clamping/charging for parking.

As for reclaiming the VAT, the right to reclaim VAT is on the basis the VAT registerd business has incurred a VATable expense for a business purpose. In other words, if the fine occured whilst on business then yes it can be recovered. But if the fine has "Asda Carpark" as the location and the business has no business reason for being parked there, then how can it be for a business purpose?

In reality, such a small value will easily slip through a HMRC inspector, so reclaim it anyway and if spotted it can be justified along the lines of salesman was having a sandwich there before going onto next customer....

peter_the_piper

This is always assuming that the ppc has remembered to register for vat, we all know how forgetful they are. They have also been known to use anothers vat number, Barclays comes to mind IIRC.

FatAndy

JasonLVC wrote: »

In reality, such a small value will easily slip through a HMRC inspector, so reclaim it anyway and if spotted it can be justified along the lines of salesman was having a sandwich there before going onto next customer....

On the other hand you could "reclaim" the full cost of the invoice by not paying it.

give_them_FA

A far better policy is not to pay it. Then the question of reclaiming it does not arise.

AltheHibby

Also,

As a business you could write to them asking for a VAT invoice and see what happens. When, not if, they refuse to do so, have a word with HMRC...

HO87

AltheHibby wrote: »

Also,

As a business you could write to them asking for a VAT invoice and see what happens. When, not if, they refuse to do so, have a word with HMRC...

I go with GTFA's assessment. The VCS v HMRC Upper Tier Tax case is pretty clear and, in effect, upheld the judgment of the lower tier from the case a year ago. During that time there has been at least one case I can recall of a PPC refusing to supply a VAT receipt.

As the legality, or the legal authority, of the original invoice must remain seriously in question the discussion of whether VAT can be recovered is somewhat redundant. If you do not pay the invoice there is no VAT to be reclaimed.