In Vehicle Control Services Ltd v HMRC (CA – 13 March) a company (V) operated a ‘parking control’ service for landowners. It did not account for VAT on all of the amounts which it received from motorists. HMRC issued an assessment and V appealed contending that the disputed amounts were penalties for contraventions which should be treated as damages for trespass and as outside the scope of VAT. The CA unanimously accepted this contention and allowed the appeal. Lewison LJ observed that the contract between V and the landowner gave V the right to eject trespassers and the contract between V and the motorist gave it the same right. He held that where V imposed an additional parking charge instead of towing away a vehicle that charge represented damages for trespass which was outside the scope of VAT.
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In Vehicle Control Services Ltd v HMRC (CA – 13 March) a company (V) operated a ‘parking control’ service for landowners. It did not account for VAT on all of the amounts which it received from motorists. HMRC issued an assessment and V appealed contending that the disputed amounts were penalties for contraventions which should be treated as damages for trespass and as outside the scope of VAT. The CA unanimously accepted this contention and allowed the appeal. Lewison LJ observed that the contract between V and the landowner gave V the right to eject trespassers and the contract between V and the motorist gave it the same right. He held that where V imposed an additional parking charge instead of towing away a vehicle that charge represented damages for trespass which was outside the scope of VAT.
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