BPA say "Parking enforcement on private land is not subject to VAT "

Philter

On Twitter the BPA have just said:

"Parking enforcement on private land is not subject to VAT http://!!!!!!!/ZhrRYG"

Here is the page which the BPA link to in the above tweet (b.i.t.l.y links seem to scramble here). It's basically the findings of the March 2013 VCS v HMRC appeal.

http://www.lexology.com/library/detail.aspx?g=8a167dd9-50da-4dc8-bdf6-e41a89a1b35d

So I assume that they must agree that POPLA must now stop finding in favour of PPCs when they argue that the PCNs are pre-agreed contractual sums, as opposed to damages due to breach of contract - which they've been doing. Obviously, if they are contractual sums, then VAT is due.

PPCs must now prove actual loss, and BPA affiliated PPCs cannot rely on the argument that PCNs are contractual sums and therefore don't have to reflect actual loss. See my previous thread for examples of where they've done that repeatedly recently:

https://forums.moneysavingexpert.com/discussion/4526847

I have taken a screenshot, in case the BPA remove the Tweet, but you'll find a link to the BPA's Twitter account below.

https://twitter.com/BritishParking

Fergie76

Surely it should be for HMRC to decide if VAT is due and not the BPA?

The_Slithy_Tove

Fergie76 wrote: »

Surely it should be for HMRC to decide if VAT is due and not the BPA?

Indeed. What the BPA really mean is "PPCs don't pay VAT on Parking Charges to HMRC".

Nothing changes, however. The PPCs and POPLA still choose (and confuse)
* Damages due to breach of contract - no VAT, but also should be limited to actual damages
* Contractural Charge which IS subject to VAT, hence should be badgered for VAT invoice.

spacey2012

When you have that kind of money, you tell HMRC what to do.

Fergie76

This is the link the BPA were referring to when they said VAT is not due - http://www.lexology.com/library/detail.aspx?g=8a167dd9-50da-4dc8-bdf6-e41a89a1b35d

nigelbb

Fergie76 wrote: »

Surely it should be for HMRC to decide if VAT is due and not the BPA?

It's actually the courts who provide the final decision and in the case of Vehicle Control Services Limited v HMRC in the Court of Appeal referenced in the BPA Tweet the decision is that the monies levied for infringing VCS's rules are not charges (subject to VAT) but damages for breach of contract (not subject to VAT).

HMRC may take the case to the House of Lords & get a different decision but as it stands the fact that these alleged "charges" have been deemed as penalties is a very powerful legal argument that they are actually unenforceable as they are not a valid pre-estimate of loss. Even where you have so called penalty clauses in a contract e.g. for late delivery they cannot be a fine or penalty or some arbitrary sum of money but must just be recompense for the losses incurred by that late delivery.

Philter

This is good news though. POPLA have recently been repeatedly upholding the PPC argument which says that PCNs don't have to reflect actual loss because PCNs are just contractual sums, which the driver agrees to when he parks. They cannot use this argument any more, because if they say that they are contractual sums, then the PCNs are VAT liable.

PPCs have been using the following 3 arguments, depending on what suits them best:

1) PCNs are damages due to breach of contract (must reflect actual loss)
2) PCNs are damages due to trespass if no contract was entered into (compensation)
3) PCNs are contractual sums pre-agreed by the driver when he parks and doesn't adhere to the terms and conditions (doesn't have to reflect actual loss)

According to the BPA, PPCs can not use number 3, because contractual sums are VAT liable and the BPA say that PCNs are not VAT liable. PPCs must prove that their PCNs reflect actual loss.

I would say that the best course of action is to respond immediately to PPCs upon receipt of a PCN, asking for proof of the land owner's actual loss, proof that their contract allows them to take legal action on behalf of land owners etc etc. This way they cannot claim that they needed to spend money on an appeal, or not tracing the RK via the DVLA etc. The actual loss will amount to nothing more than the original parking fee (if it wasn't paid) and perhaps the material cost of the ticket and plastic envelope. If everyone who got a parking ticket immediately offered a couple of quid to the landowner as damages, the PPCs would be put out of business. I recently did this and UKPC gave up without a fight, and within 10 days of my letter to them.

Edit: Posted at the same time as nigelbb's...

Guys_Dad

Philter wrote: »

So I assume that they must agree that POPLA must now stop finding in favour of PPCs when they argue that the PCNs are pre-agreed contractual sums, as opposed to damages due to breach of contract - which they've been doing. Obviously, if they are contractual sums, then VAT is due.

So they then add VAT to the PCN charges and change the signs to read along the lines of "£50.00 plus VAT" ?

Philter

Guys_Dad wrote: »

So they then add VAT to the PCN charges and change the signs to read along the lines of "£50.00 plus VAT" ?

They'd also have to prove that they'd adhered to VAT regulations, eg:

1) Account for VAT due on Parking Charges at the point of parking

2) Allow the motorist to pay the Parking Charge when he parks, prior to any Parking Charge Notice being issued

3) Send out VAT invoices to VAT registered customers so that they can claim back the VAT component of the Parking Charge

4) Issue credit notes for cancellations

5) Account to HMRC for the VAT element of the Parking Charge

None of which they do, as far as I'm aware...and I can't believe that they'd want to start doing that.

nigelbb

Philter wrote: »

2) PCNs are damages due to trespass if no contract was entered into (compensation)

In this case the PPCs cannot pursue the matter as only the person who has exclusive possession of the land in question can sue for damages for trespass i.e. the landowner or tenant.

I can't see Asda etc wanting to sue their customers as one of the main reasons they use PPCs to do the dirty work at arm's length is so that they have plausible deniability when their customers complain about their rough treatment at the hands of the PPC.

Philter

nigelbb wrote: »

In this case the PPCs cannot pursue the matter as only the person who has exclusive possession of the land in question can sue for damages for trespass i.e. the landowner or tenant.

I can't see Asda etc wanting to sue their customers as one of the main reasons they use PPCs to do the dirty work at arm's length is so that they have plausible deniability when their customers complain about their rough treatment at the hands of the PPC.

You're right of course, I was just listing the arguments that they use.