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

95Rollers

NCP were beaten in court by HMRC. 

Their machines offer no change and they were pocketing the overpayment money without paying tax on it.  BUT an overpayment was only made because the machines didn't return change.  So if someone had to pay £1.50 - but put £2 - they've paid £2 for the parking instead of £1.50.  The extra 50p isn't a tip or a gift!  So therefore forms up the payment (of varying Amounts) so therefore taxable. 

I'm definitely going to to some whistle blowing! I pay my taxes and VAT so what gives them the right not to!?!  "THEMS THE RULES"!!!  We are I national debt, taxes are up, cost of living is so its vital those who aren't paying their way are brought to justice!

Snakes_Belly

ihatetrump did you ever obtained the published accounts of a PPC? I have looked at their accounts online but they don't tell the full story. 

Humdinger1

Presumably HMRC has all the powers it needs to compel detailed info so it can make the calculation.   Good that there's a reporting hotline; could someone repost the link please for convenience? Humdinger 

Jenni_D

Page 3 (previous page), 2nd post.  

Humdinger1

ihatetrump said:

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.

Thanks Jenni

Grumpy_chap

ihatetrump 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.”

This comment quoting HMRC manual seems to be incorrect on several fronts.

1. Private car park operators cannot issue "fines" only "penalties for breach of contract"
2. General contract law only permits penalties for breach of contract to be actual or, in the case of liquidated damages, a genuine pre-estimate of the costs that will be suffered by the other parties breach.  I would say that the sign setting out charges in advance must fall under the liquidated damages genuine pre-estimate category. Damages cannot be punitive or "by way of punishment"
3. Given (2), the genuine losses suffered are the reduced income associated with the car park space not being available to be used by another paying customer and so would fall within the scope of VAT.

It seems as though whoever wrote that at HMRC was careless, at best.

Can the hive mind of this forum add any better clarity to those points?

However, 

ihatetrump said:

I have requested and been denied copies of VAT invoices and was met the following reply:

AIUI, VAT invoices are only required to be provided where both the customer and the supplier are VAT-registered entities.  If the OP was requesting VAT invoices as an individual then there is no obligation to provide and makes you wonder why the PPC went for such a complicated response.

MothballsWallet

Oh if only we could link the PPCs and their legals to Putin, then HMRC and the rest of the UK Government would be falling over themselves to investigate and take action...

Snakes_Belly

Took a look at Excel's accounts and noticed that they had received a large grant in the latest accounts. 

D_P_Dance

But did not Beavis v UKPC decide that debt collection was included in the cost of the BOC?

Fruitcake

D_P_Dance said:

But did not Beavis v UKPC decide that debt collection was included in the cost of the BOC?

No, but Beavis vs ParkingEye did.