The change in regulations, which we have been keeping our followers up to date with, will come into effect on the 9th December 2021.
Full details of the amendment can be found at:
Up until recently, the question of who pays the VAT on enforcement fees was up in the air...
The High Court Enforcement Officers Association (HCEOA) campaigned hard for the amendments which have now gone through, whilst still maintaining its commitment to the idea that, in a perfect world at least, no VAT should be charged on enforcement fees at all.
This isn’t a perfect world though, and the amendments are still welcome news to the HCEOA and its members.
Lord Wolfson has now informed Parliament about the changes via a Written Ministerial Statement, which details how this new amendment to the Taking Control of Goods (Fees) Regulations 2014, clarifies that the VAT incurred on enforcement agent fees may be recovered from a debtor if the creditor is not VAT registered.
This won’t be ‘new’ news to our followers though, as we’ve kept you up to date at every stage of the process so far, but it gives the most official confirmation yet.
There is devil in the detail too, as one further amendment to Regulation 9(4) states that the costs of auctioning goods by way of internet auction site or sold other than by auction, is now a fee to the enforcement agent and not a disbursement as previously considered.
For further clarification, it is also the case that the sums referred to in Regulation 9(4) and in the Schedule, are exclusive of VAT. This means that a sum equivalent to VAT is recoverable from the debtor in addition to those sums.
As we’ve said, this is just the small print on a story we’ve been writing about for weeks and months now, but it could be well worth your time having a scan of that small print.
For anyone who isn’t quite sure what it means for them, or if you have any other questions regarding VAT on enforcement fees, you can get in touch with the team and we’d be only too happy to talk you through the changes.