On Thu, 10 Feb 2011 01:23:11 +0000, "Richard J."
wrote:

Charles Ellson wrote on 09 February 2011
22:48:24 ...
On Wed, 09 Feb 2011 20:49:47 +0000, "Richard J."
wrote:

wrote on 09 February 2011 18:18:19 ...
"Graeme wrote in message
...
On 09/02/2011 14:29, tim.... wrote:
wrote in message
...

wrote in message
...

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...
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If the flat management company wasn't VAT registered (because the
turnover's below the threshold), then no need to add VAT to the
clamping fee.

Actually the flat management company is unregistered because, as a
resident owned company, it is not allowed to register.

Why is that?

It's not a trading company.

I didn't think HMRC cared who the proprieter is. And, if not
registered, how could the company even pay money to HMRC?

It's registered at CoHouse and pays CT to HMRC, but it's not allowed to
register for VAT.

It pays money to HMRC for VAT in the same way that every other consumer
does.

Now I'm even more confused -- consumers don't pay VAT to HMRC. They pay
it
to a trader, who passes it on to HMRC. Consumers have no mechanism for
paying VAT directly to HMRC.

Yep, and tha's exactly how the MC paidm VAT to HMRC

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?

No.

He came around for free, but whenever he extracted a fine from a
transgressor, we had to pay the VAT (so we were told)

That is complete rubbish. What the clamping company extract is not a
fine (which can only be levied in accordance with legislation), but a
release fee. That fee, like any other amount charged by a
VAT-registered company, is liable to VAT, which must be paid by the
payer of the fee.

If the clamping company wish to invoice the flats management company
with 20% of the release fee as a sort of commission, then that is a
separate transaction which is itself liable to VAT.

Of course in both cases, the release fee and the commission could be
quoted as VAT-inclusive amounts, but it doesn't alter the basics of the
way VAT operates. Similarly, companies which advertise an offer to pay
the VAT on your purchase are in reality just lowering the ex-VAT price
by 16.67%; you still pay VAT on the reduced price.

ITYF the VAT might arise because a service not involving a cash
transaction from the user is being supplied which is of value to the
management company; HMRC staked their claim on "services in kind" many
years ago. The arrangement seems rather like the management company
allows the clampers to operate on their land in return for receiving
the service of trespassers being deterred, the VAT being based on the
closest identifiable cash transaction in the proceedings.

But the management company isn't (and cannot be) registered for VAT, so
even if they did charge for allowing the clampers access to their land,
there wouldn't be any VAT payable.

I didn't mention charging by the maintenance company, the only
admitted service involved in my scenario is that of the clampers
supplying the maintenance company. A liability to be charged VAT can
arise from receiving goods or services (in this case, keeping the car
park clear of unwanted vehicles) even if you don't pay for them if
HMRC regard the recipient of those services as paying in kind
(allowing the clampers to operate on their land) for something which
is not a gift, see e.g. 3.7 in
http://customs.hmrc.gov.uk/channelsP... Type=document
[http://tinyurl.com/5v69gy4]
It does not matter whether the recipient of the services is registered
for VAT or not as the VAT has to be collected and accounted for by the
supplier of the services or goods.

And VAT is liable already on the
release fee, so I don't see how it can be payable twice on the same
transaction.