Court Enforcement Services welcomes the current discussions on VAT on High Court enforcement fees
When our company entered the market in 2014 we took opinion on how VAT should be applied. The recommendation along with guidance received by the High Court Enforcement Officers Association (HCEOA) was approved by HMRC. That VAT is recoverable from the debtor, however it is irrecoverable by them.
We have followed this guidance and will continue to do so until otherwise advised. We have however developed our system to be flexible in how VAT can be applied on fees.
Our view is that VAT should be zero rated on High Court enforcement fees, despite suggestions that it would be best charged to the creditor as it can be recovered back from HMRC. We feel that this approach would penalise individual claimants, those with tribunal awards and other creditors who are not VAT registered. These creditors would be left with no option but to effectively lose 20% of the fees off of their claim.
Given the guidance from HMRC and legal opinion from 2014 there has been no incorrect application of VAT, but we support a review of policy.
We expect a decision to be made soon. As a company that has driven change within the High Court enforcement industry, we welcome the clarity that this will provide.
Should there need to be a change of practice we will of course notify you immediately.
If you would like to discuss the matter further, please do not hesitate to contact us: email@example.com
Thank you for your continued support.
Court Enforcement Services Ltd