Vehicle Control Services Ltd v Revenue and Customs Commissioners
| Jurisdiction | UK Non-devolved |
| Judgment Date | 16 February 2011 |
| Neutral Citation | [2011] UKFTT 125 (TC) |
| Date | 16 February 2011 |
| Court | First Tier Tribunal (Tax Chamber) |
[2011] UKFTT 125 (TC)
Barbara J King (Tribunal Judge) (Chairman); G Noel Barrett LLB
Tim Brown of Counsel for the Appellant
Julian Winkley of HM Revenue and Customs, for the Respondents
VAT - parking enforcement on private land- does management company with a licence have sufficient interest in land to take proceedings for trespass as principal- no-parking charges are in consideration of supply of services under contract with motorist - therefore subject to VAT at standard rate - charges which are notified are not punitive fines akin to damages in lieu of trespass outside scope of VAT.
1. Vehicle Control Services Limited (VCS), which registered for VAT on 5 October 2000, manage and operate parking enforcement on private car parks. Until 2007 they accounted for VAT on some of their income from parking infringements but considered that other income was outside the scope of VAT because it was paid as damages in lieu of trespass. VCS say that this latter income was received by them as principal and not as agent for the landowners. HMRC say that the income from these infringements was received either as part of a contractual arrangement between VCS and the motorist or, if it was damages, it was received by VCS as agent for the landowners and therefore retention of it by VCS was as remuneration for a supply of services to the landowner.
2. This appeal relates to all the income which VCS previously considered was outside the scope of VAT. The first appeal by VCS concerned VAT for periods from 04/05 until 10/09. Pending the hearing of this appeal, VCS made a payment under protest of the VAT for the income under dispute. A further appeal was lodged in respect of ongoing income in the same category under appeal number TC/2010/01071 and this was consolidated with the appeal being heard under number TC/2009/15554. The amounts are not in dispute.
3. Simon Renshaw-Smith, the managing director of VCS, attended the hearing and gave oral evidence. He produced a sample of the "Terms and Conditions of contract" which VCS enter into with each of their clients -the owners of the private land involved. He said that this appeal related to the "Fully Comprehensive Scheme" provided by VCS for their clients and that the client in each of the car parks involved allowed only authorised users in the car park ie there was no "pay and display facility" in the car parks involved.
4. The "Fully Comprehensive Scheme" contract includes at 3.1 a clause to the effect that VCS will erect and maintain warning signs for which the client will pay £30 plus VAT per sign per annum. VCS will also supply all permits for authorised vehicles at a cost of £2 per permit and £2.50 per book of 50 guest permits. These items of income are not the major income for VCS. Most of the income of VCS comes from motorists who pay VCS money following a parking ticket being applied to their vehicle.
5. The obligations of VCS are in clause 3 which includes that VCS will:
3.4 Inspect the Car Park at such intervals as the Company (VCS) in its discretion thinks necessary from time to time and take such action in respect of vehicles there found as outlined in 3.1 and 4.3 including the issue of parking charge notices, vehicle immobilisation and/or towing away as the Company shall think fit
3.5 Collect (which may extend to debt recovery and/or court action) and retain all fees/charges from parking enforcement action as stated in clause 3.4 herein
3.7 Operate in accordance with the British Parking Association's AOS code of practice-Parking Enforcement on Private Land and Unregulated Car Parks.
6. A copy of the "VCS Clamp Sign, Design 22" was produced. This contains various conditions and logos to the effect that "Parking Charges" apply at "£80 including VAT" if paid within 7 days and £120 thereafter. Wheel clamp charge is at "£100 including VAT". Cars removed and impounded incur a charge of "£160.... including VAT." Vehicle storage is at "£20 per day …including VAT." If more than one enforcement procedure is exercised then both charges are applied. It also contains the wording
You are entering into a contractual agreement. Do not park in this area unless you fully understand and agree to the above contractual terms and conditions.
7. Samples of VCS "PARKING CHARGE NOTICES" were also produced. These are the notices which are affixed to the windscreen of vehicles which VCS consider have parked "otherwise in compliance" with the terms for parking on the private land involved in each site.
8. The "PARKING CHARGE NOTICE" contained a list of contravention codes. The "codes" printed in a horizontal line do not accord precisely with those in the subsequent list but the numbers appear to be as follows:
24- NOT PARKED CORRECTLY WITHIN THE MARKINGS OF THE BAY OR SPACE
40- PARKED IN A DISABLED SPACE WITHOUT CLEARLY DISPLAYING A VALID
DISABLED PERSONS BADGE.
80- PARKED FOR LONGER THAN THE MAXIMUM PERIOD PERMITTED
81- PARKED IN A RESTRICTED AREA OF A CAR PARK
82- PARKED AFTER THE EXPIRY OF TIME IN A PAY AND DISPLAY CAR PARK
83- PARKED WITHOUT CLEARLY DISPLAYING A VALID TICKET/ PERMIT
86- PARKED BEYOND THE BAY MARKINGS
89- VEHICLE PARKED EXCEEDS MAXIMUM WEIGHT AND/OR HEIGHT PERMITTED IN AREA
94- PARKED WITHOUT DISPLAYING A VALID TICKET/PERMIT
95- RETURING TO A CAR PARK WITHIN THE NO RETURN PERIOD/TIME
AB- OTHER(SPECIFY)
9. Alison Green, an officer of HMRC, gave evidence that this Appeal concerned only the income from contraventions under codes 24, 40, 81 and 86. Mr Renshaw-Smith, whilst stating that he was not a lawyer, thought the reason for VCS not accounting for VAT in respect of income from these codes was that he thought that VCS had considered that the income from these was more in keeping with damages for trespass. He thought that income from the other codes was received by VCS as part of a contract between VCS and the motorist and VCS had included this income in...
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Vehicle Control Services Ltd v The Commissioners for HM Revenue & Customs
...for provision of services to landowner. This was an appeal by the taxpayer against a decision of the First-tier Tribunal ([2011] UKFTT 125 (TC); [2011] TC 00999) that certain parking enforcement charges which were retained by it, as the operator of car parks on private land, were considerat......