Graeme Wall gurgled happily, sounding much
like they were saying:

I think what you're saying is that you paid VAT to the clamper, who
must have been VAT registered. Did you pay him for his services (which
would have been VATable), or did he get paid through collecting
VAT-inclusive charges from illegal parkers? Or, I wonder, did he
illegally collect "VAT" from you, and just pocket it?

I don't know how he accounted for it, but I understand that his MO was
that he charged the clampee a "fine" and the business who hired him the
VAT element of that fine, which they would claim back from HMRC on
their VAT return.

Except than in our case we weren't registered and hence not able to
claim it back.

No, I still don't know why he worked that way (or indeed, if it was
legally correct).

Doesn't sound correct to me. Did he charge you a base fee for his
services?

If he did, that'd have been subject to VAT on the invoice for it. But in
the situation described, somebody was definitely being a bit disingenuous.

If Joe Public is charged £100+VAT for a VATable service, Joe Public pays
£20 VAT, not some other entity.

If the VAT-reg service provider wants to charge Joe Public £100 all-in,
and get another £20 all-in from somebody else as "commission" or
whatever, then he can - by charging Joe Public £83.33+vat, and the other
entity £16.67+vat. But that other entity will only be able to claim back
£3.33 on their return, not £20.

Anything else is a scam.