Are PPC's evading paying VAT on collection costs resulting in lost £'000's to HMRC?

ihatetrump

I think those who operate as a PPC under a management agreement with a 3rd party landowner will almost certainly need to be VAT registered - regular parking charges are subject to VAT and with an annual turnover threshold of £85,000, they are required to be VAT registered. I can't see many PPC's turning over less than £85k in legitimate parking charges - even if they try to set each car park up as a separate limited company and somehow try to create convoluted ownership structures to avoid VAT registration.

ihatetrump

The PPC has finally confirmed via BWL that (and I quote):

their position remains that the PCN sums and costs associated to date are outside the scope of VAT

Debt collection costs are NOT outside the scope of VAT - so this PPC is clearly operating a scheme that defrauds HMRC of much needed VAT.

Needless to say, I've already completed HMRC's whistleblower form, which for those may be interested can be found here:

https://www.tax.service.gov.uk/shortforms/form/TEH_IRF

Having scammed the motorist, they now want to scam HMRC.

Coupon-mad

I was thinking of doing that about another PPC or two.  I won't name them but they are good examples of PPCs which seem to be defrauding HMRC as regards the false £70.

D_P_Dance

I did it some years ago, never had a reply.

Snakes_Belly

It needs people who have actually lost and had to pay up to complain and many of those would be defendants who did not fight the claim or turn up at court. Posters who end up with a default CCJ. 

There is a friend of my family who now works for the HRMC in an investigative role. Not sure exactly what she does but she attends court and I don't think that it is a civil court.   

prowla

hullensien said:

“Our client will not be issuing you a VAT invoice due to the HMRC Internal Manual “VAT Supply and Consideration” at VATSC05840 which states:
 “Where a car park operator makes an offer of parking under clear terms and conditions, setting punitive fines for their breach, the fines constitute penalties for breaching the contract, rather than additional consideration for using the facilities. Consequently, they are outside the scope of VAT.”

are they allowed to use the words “fines” and “penalties”

In addition to "fines" and "penalties", the word "punitive" caught my eye.

Snakes_Belly

prowla said:

hullensien said:

“Our client will not be issuing you a VAT invoice due to the HMRC Internal Manual “VAT Supply and Consideration” at VATSC05840 which states:
 “Where a car park operator makes an offer of parking under clear terms and conditions, setting punitive fines for their breach, the fines constitute penalties for breaching the contract, rather than additional consideration for using the facilities. Consequently, they are outside the scope of VAT.”

are they allowed to use the words “fines” and “penalties”

In addition to "fines" and "penalties", the word "punitive" caught my eye.

The £60.00 was not initially part of the signage/terms and conditions. It appeared at the claim stage. Now even in the signage it states that it is for debt collection.

patient_dream

their position remains that the PCN sums and costs associated to date are outside the scope of VAT ???

A FLAWED reply FROM BWlegal

The VCS v HMRC case regarding VAT was only about the parking charge because then, the fools who introduced the fake add-on had not invented the scam then.

As you say ... Debt collection costs are NOT outside the scope of VAT

The question must also be asked, what do the llikes of BWLegal do with the VAT when people pay them direct over the phone

HMRC should re-open this as the chancellor and treasury is in dire need for money

Umkomaas

prowla said:

hullensien said:

“Our client will not be issuing you a VAT invoice due to the HMRC Internal Manual “VAT Supply and Consideration” at VATSC05840 which states:
 “Where a car park operator makes an offer of parking under clear terms and conditions, setting punitive fines for their breach, the fines constitute penalties for breaching the contract, rather than additional consideration for using the facilities. Consequently, they are outside the scope of VAT.”

are they allowed to use the words “fines” and “penalties”

In addition to "fines" and "penalties", the word "punitive" caught my eye.

PPCs can't use those terms, but HMRC can call them what they like - there again, none of those terms are strangers to their operations! 🤓

Snakes_Belly

Initially the PPC's were adding on £60.00 to the claim as a separate item for debt collection. It was not then part of the terms and conditions on the signage. On the claim that I received it was shown as a separate item but did not appear in the terms and conditions on the signage.

When claims started to be dismissed for abuse of process that is when some PPC's started state on their signage that £60/£70 would be added for debt collection.