VAT on HCEO fees.

[Peterbard]

 

When a creditor approaches a HCEO to enforce a judgement he is charged a fee.

The HCEO will issue a VAT invoice to the creditor. The HCEO are liable for VAT because they meet the HMRC criteria, A for profit business, with a turnover of over £85,000 pa.

 

If the creditor is VAT registered, he is liable for that fee, as he can recover it in the usual way, by offset against VAT received. If he is not VAT registered, then that fee is recoverable from the debtor.

Not to be confused with fees recoverable by the HCEO appointed agent.

 

The HMRC will demand VAT on the contracting bailiff’s profit(fees), being a self-contained business, as above.

 

The contracting Bailiff has no other way of recovering tax paid to the HMRC, other than by billing the debtor.

In other forms of enforcement there are statutory provisions to repay the bailiffs VAT.

 

It is the same in most transactions.  The end purchaser is not issued with a VAT invoice and therefore cannot reclaim the tax, we must bear that cost.

[Isiris]

Hi

i have just had a heated conversation with a HCEO company.

 

I asked them for a VAT receipt for the Compliance element of the debt (£15).

They said, we dont have to provide one as it would be offering you a discount.

 

I did lose the plot and ask to speak to the one who had the brain cell for the day which didnt help

but Article 13 of the  VAT Regulations 1995 (SI 1995/2518)

a VAT registered business is required to supply a proper VAT invoice when requested to do so by a VAT registered customer.

So am I entitle to ask for the receipt?

Thanks

 

please reply to my thread here:

 

 

[Peterbard]

If you are the debtor, no you are not entitled to a vat invoice.

 

V.A.T receipts are only supplied to the creditors who instruct the bailiff, as it is only he who pay it, on instruction.

You cannot reclaim VAT as the end user.

 

Certain people seem unable to understand this simple matter, but, as it stands, EA who are contracted self, employed and not employed directly by the HCEO can charge VAT, in the normal way.

 

 

Edited February 14, 2020 by Dodgeball

[Andyorch]

Topic open.

[Peterbard]

Thanks Andy. 

I have replaced post one  with Andy's help. Hopefully it is more Intelligible.

As for challenging the status quo regarding VAT on fees.

 

As it stands the position is as stated. One has to remember that the collection of fees is a matter for the HCEO and the possession regarding VAT to the revenue.

To my mind it is pointless pursuing an action against a bailiff for a procedure which is agreed by the high court and the HMRS.

 

You can complain sure, but any action,  say under CPR84.16(detailed assessment, so called) would be spurious, to say the least. Costs of such an absurd application could be extortionate.