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

Guys_Dad

Philter wrote: »

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.

And ordinary 50p per hour parking tickets (as against the PCNs). Are they not liable for Vat and some of the procedures you outline above? I really don't know, I am not being clever.

Because, if they do include VAT, then the BPA/POPLA view that the PCNs are contractual would simply make the PCNs the big brothers of the normal per hour charges.

nigelbb

Regular parking charges are subject to VAT at the standard rate i.e. 20%. This is for regular pay & display or pay on exit. There never has been any question but that these parking charges are VATable.

Where the VCS decision has left the whole industry in a very difficult position is that they have all the time been trying to claim that their £100 charges are not a penalty at all but a parking charge that you agreed to pay. VCS in trying to fiddle the books so they are not liable for VAT & can keep all of their ill-gotten gains instead of paying the VATman his share have shot themselves & every other PPC in the foot.

Philter

Guys_Dad wrote: »

And ordinary 50p per hour parking tickets (as against the PCNs). Are they not liable for Vat and some of the procedures you outline above? I really don't know, I am not being clever.

Because, if they do include VAT, then the BPA/POPLA view that the PCNs are contractual would simply make the PCNs the big brothers of the normal per hour charges.

I'm sure that they could change everything to make sure that they adhere to VAT regulations (they'd still be open to Unfair Terms in Consumer Contracts Regulations 1999 etc though), but at the moment I don't believe any of them do.

Minster Baywatch, UKCPS and Premier Park are some of the PPCs who have recently won appeals on the basis that their PCNs are contractual sums, not damages reflecting actual loss for breach of contract. I think it would be worth asking the next PPC who tries this argument on for a VAT invoice; here is what HMRC says about VAT invoices:

"When a VAT invoice must be issued

If you are registered for VAT you must give any VAT-registered customers a VAT invoice for any standard-rated or reduced-rated goods or services you sell them.

If you are a retailer, you do not need to issue a VAT invoice or receipt unless your customer asks for one.

As a VAT-registered supplier, you may be liable to a fine if you do not issue a VAT invoice for a supply you have made when asked to do so by a VAT-registered customer.

There is a time limit within which VAT invoices must be issued – see the section in this guide on time limits for issuing VAT invoices."

and

Simplified VAT invoices

If you make retail sales and you make a sale of goods or services for £250 or less including VAT, then when a customer asks for a VAT invoice, you can issue a simplified VAT invoice that only needs to show:

the seller's name and address
the seller's VAT registration number
the time of supply (tax point)
a description of the goods or services

Also, if the supply includes items at different VAT rates then for each different VAT rate, your simplified VAT invoice must also show:

the total price including VAT
the VAT rate applicable to the item

and

"A VAT invoice must show:

an invoice number which is unique and follows on from the number of the previous invoice - if you spoil or cancel a serially numbered invoice, you must keep it to show to a VAT officer at your next VAT inspection

the seller's name or trading name, and address
the seller's VAT registration number
the invoice date
the time of supply (also known as tax point) if this is different from the invoice date - see below
the customer's name or trading name, and address
a description sufficient to identify the goods or services supplied to the customer

For each different type of item listed on the invoice, you must show:

the unit price or rate, excluding VAT
the quantity of goods or the extent of the services
the rate of VAT that applies to what's being sold
the total amount payable, excluding VAT
the rate of any cash discount
the total amount of VAT charged"

http://www.hmrc.gov.uk/vat/managing/charging/vat-invoices.htm

These 2 points are interesting ones:

the time of supply (tax point)
a description of the goods or services

They'd have to say exactly what it was that you got in return for your £60 PCN (permission to park outside the white lines/permission to park for as long as you want/permission to park in a disabled bay??), and also the time at which it was supplied to you.

There are many regulations surrounding the supply of VAT liable services, and I don't believe that these companies adhere to them.

Philter

nigelbb wrote: »

Where the VCS decision has left the whole industry in a very difficult position is that they have all the time been trying to claim that their £100 charges are not a penalty at all but a parking charge that you agreed to pay. VCS in trying to fiddle the books so they are not liable for VAT & can keep all of their ill-gotten gains instead of paying the VATman his share have shot themselves & every other PPC in the foot.

Exactly this.

Coupon-mad

This is good news, thanks for posting that snippet! :T

atilla

I do suspect HMRC will indeed be interested in this stance. Especially if documents can be produced where the scammers have argued they are contractual charges.

I still say some of them are gonna fold and magically reappear under a new name when the VAT bill lands.

Guys_Dad

Seems to me that in the appeal to a PPC should be something along the lines of

'If you reject this appeal, please supply me with a POPLA code.However, as I am seeking advice from my accountant and may decide to pay, if your charge is a contractual charge for parking and not any form of penalty, please resend your invoice complete with the VAT element identified in order that I can claim the VAT back, should I decide to pay'

HO87

I have no wish to cause any discomfiture but the arguments being rehearsed above are based on a single BPA tweet. Providing a detailed analysis of any argument that may or may not be behind the tweet and eliminate all chances of misunderstanding isn't going to be very easy- if possible at all - in 140 characters.

This is far more likely to have been an off-the-cuff comment from someone in their PR department who may not have a good grasp of the niceties of VAT applicability.

I make this comment based on the fact that the BPA have been behind a relatively quiet but consistent move to have PCN's aligned to the "contractual charge" option for the last 12 months or so - certainly some time before POFA came in. Were there any accuracy, or depth, to the tweet concerned then that would signal a significant about turn by the BPA. I can't envisage them failing to bring POPLA along with them and leaving them high and dry.

That said, whilst on the one hand the BPA have been pushing "contractual charges" they continue to allow representations suggesting that some operators apply the "liquidated damages" option. This schizophrenic outlook could quite easily bring about misunderstanding in BPA Towers staff who don't have a frontline involvement with PPC's.

nigelbb

It wasn't an off-the-cuff comment from someone in their PR department it was a link to a legal analysis of the VCS v. HMRC case in the Court of Appeal. The fact that the CoA held that these charges (at least in the case of VCS) are for breach of contract rather than contractual charges carries much more weight than anything that one of the BPA Towers staff may tweet.

atilla

Either way, it's all grist to the mill for those lovely VAT inspectors who must surely be looking closely at this whole dodgy practice. Bearing in mind, VCS won their latest battle only with regards to a specific point, namely, the permits.(assuming i understood it correctly).
The potential size of the pot is just too big for HMRC to ignore.