Do PPC's pay income tax?

[sameagle]

Running a small business, [i'm a window cleaner], I always arrive at the end of each financial year with some bad debts.

 

I even have a fine, upstanding pillock of the community, a Policeman, that has issued a cheque that has bounced all the way down the High Street, [and it was only for 14 quid!]

 

Now, I can set these debts off against income tax, so that helps a bit.

 

What I'd like to know is, how do the people that run private parking companies go on?

 

Do PPC's say, "This person has been issued with a ticket, and has not paid, therefore that is a bad debt", then write it off against tax?

 

If they do, I wonder if that is quite, erm..."legal"?

 

After all, it's only their word that a "debt" exists, it's never been "proved" - in my case, I could take an income tax inspector to each house, put my hand on my heart, and say, "I've cleaned at that house, and never been paid"

 

I wonder what others think - come to that, I wonder what the taxman thinks?

[johnvernon74]

Think might be different with PPC as they are usually collected come what may ! As for people owing money on window cleaning thats terrible. As for PC I'd ask him to pay again and any bank charge and them write to his police force. As far as I know its illegal to write a cheque knowing you have no funds to meet it.

[MARTIN3030]

As far as I know its illegal to write a cheque knowing you have no funds to meet it.

 

It is a criminal offence.

[Tony P]

Do PPC's say, "This person has been issued with a ticket, and has not paid, therefore that is a bad debt", then write it off against tax?

 

No. Not like that.

I would expect PPCs to be using a 'cash accounting' basis for recording Gross Income. In other words 'Sales turnover' is only monies received.

 

Such accounting methods are permitted for VAT purposes, under which the 'trader' would only consider VAT Input Tax on money actually received and allocate and account to HMR&C a propotion of that (currently a fifth?) as VAT.

[Old Snowy]

No. Not like that.

I would expect PPCs to be using a 'cash accounting' basis for recording Gross Income. In other words 'Sales turnover' is only monies received.

 

Such accounting methods are permitted for VAT purposes, under which the 'trader' would only consider VAT Input Tax on money actually received and allocate and account to HMR&C a propotion of that (currently a fifth?) as VAT.

That assumes that the PPC actually charges VAT in the first place. I have yet to see one example of a PPC ticket that contained a VAT analysis or even a VAT number. I am aware of instances where PPC's have flatly refused to supply receipted VAT invoices because "VAT is not payable". Apparently.

 

That inspite of the case of Vehicle Control Services Ltd v. HM Revenue & Customs early last year when it was found that VAT was payable on PPC tickets.

 

@johnvernon74 - With respect, PPC tickets are rarely pursued or indeed collected "come what may". The entire PPC business model is predicated on investing a small, set amount in brow-beating ticket recipients into submission and, of course, payment. If the recipient digs their heels in and does not pay up then the chances are that the PPC will simply move on to their next victim. Periodically, of course, some PPC's (but by no means all) do take the odd case to court. Setting aside suggestions and suspicions that some of these cases are set-ups or involve stooges, they are pursued not for the financial benefit that might accrue as a result of the judgment but simply pour encourager les autres.

[Tony P]

That assumes that the PPC actually charges VAT in the first place. I have yet to see one example of a PPC ticket that contained a VAT analysis or even a VAT number. I am aware of instances where PPC's have flatly refused to supply receipted VAT invoices because "VAT is not payable". Apparently.

 

That inspite of the case of Vehicle Control Services Ltd v. HM Revenue & Customs early last year when it was found that VAT was payable on PPC tickets.

 

If a business's VATable turnover is over the threshold (I believe somewhere around GBP 75,000pa) they MUST by Law either charge VAT on top or account for it as being included within their sales/turnover.

 

VERY INTERESTING POINTS developing here -

 

I would very much like to hear under what basis any PPCs claim "VAT is not payable" on their charges/receipts, and if they claim this because they are Zero rate or Exempt.

 

On-street parking charges (by Local Authorities) do not attract VAT,neither do legitimate Penalties imposed under Statute.

Private parking charges do, at the Standard Rate (currently 20%, I believe).

 

PPCs call their Speculative Invoices a "- - Charge". so they can hardly sidestep this.

 

If requested, the payer is entitled by Law to demand and receive a VAT Invoice/receipt that must contain certain information of the 'provider'of the VATable service - including their Name, Registered Address, VAT registration number, etc.

 

Perhaps some one who was recently sadly misguided and duped into paying a PPC could help by now insisting on receiving a VAT receipt for their payment and if it is denied tell us here the actual response. The failing to comply with the Law can then be reported to HMR&C.

 

Not an Earth changing matter - but another aggrevation directed back to those PPCs who have little respect for the Law and honest business ethics.

 

(sorry about the 'I believe' bits - I left the UK 2+ years ago and am not up to date current figures)

[Old Snowy]

If a business's VATable turnover is over the threshold (I believe somewhere around GBP 75,000pa) they MUST by Law either charge VAT on top or account for it as being included within their sales/turnover.

 

VERY INTERESTING POINTS developing here -

 

I would very much like to hear under what basis any PPCs claim "VAT is not payable" on their charges/receipts, and if they claim this because they are Zero rate or Exempt.

I agree with you entirely. The link in my post goes to the written judgment from the first tier tax tribunal and gives a substantial insight to the thinking of certain PPC's (Its not that long and is well worth reading). Attempting to summarise it the argument went something like the charges were a) "akin to a penalty" and/or b) amounted to damages in trespass and were not therefore a taxable service. The tribunal judge gave short shrift to both arguments.

 

On-street parking charges (by Local Authorities) do not attract VAT, neither do legitimate Penalties imposed under Statute. Private parking charges do, at the Standard Rate (currently 20%, I believe).

PPC's have attempted to differentiate between parking charges i.e. the fee you pay to park and the contractual [penalty] charge it is purported one agrees to by parking and they levy by way of their made up PCN. (Quite how a contractual charge cannot be "vatable" goodness only knows).

 

PPCs call their Speculative Invoices a "- - Charge". so they can hardly sidestep this.

I refer you to the reply above. It has been suggested by PPC's that the use of the word "charge" in this context is in exactly the same context as that used in "Penalty Charge Notice".

 

If requested, the payer is entitled by Law to demand and receive a VAT Invoice/receipt that must contain certain information of the 'provider'of the VATable service - including their Name, Registered Address, VAT registration number, etc.

Quite. There are several cases that I am aware of where PPC's have downright refused to supply VAT invoices.

 

Perhaps some one who was recently sadly misguided and duped into paying a PPC could help by now insisting on receiving a VAT receipt for their payment and if it is denied tell us here the actual response. The failing to comply with the Law can then be reported to HMR&C.

As above it has been tried and has been met with a refusal.

 

The issues raised in the VCS v. HMRC case is likely to be rehearsed as it would seem that VCS have now given notice of their intention to appeal to the Upper Tier and the case is likely to be listed shortly. An upper tier tribunal decision sets precedent.

 

It would be reasonable to assume that the original judgment has caused a degree of disquiet in PPC circles and there is most certainly a reluctance to abide by it. The cost to PPC's could be significant. The proprietor of VCS - Simon Renshaw-Smith - coincidentally sits on the board of the British Parking Association and the case will undoubtedly be being followed with great interest by the BPA and its membership.

[Al27]

The issues raised in the VCS v. HMRC case is likely to be rehearsed as it would seem that VCS have now given notice of their intention to appeal to the Upper Tier and the case is likely to be listed shortly. An upper tier tribunal decision sets precedent.

 

VERY interesting. I was wondering why HMRC hadn't taken a closer look at the whole 'industry'. Maybe an investigation similar to the current interest in football clubs is on the horizon once it has all been sorted.

 

VCS are between a rock and a hard place. Ironically they're attempting to argue the 'truth' - that it's all a big con and that they're not entitled to the money. Yet how can they persuade the taxman that all that lovely income that magically end up in their accounts shouldn't be there so therefore somehow isn't VATable?

 

HMRC want their money and the PPC's have done all the groundwork for them in their attempts to legitimise the practice. It's a shame in one regard that the judge came to the conclusions that he did, because they are completely erroneous.

 

But considering the alternative is business as usual AND no VAT (since nobody has any powers to close every PPC down for doing what they are doing), I'm all for the taxman waking up and taking his share.