The Ministry of Justice (MoJ) would like more time to consider their position on VAT and the application of this cost to debtors, but is more time needed considering it has been on the agenda since 2014?
This is an update to an earlier feature that you can read here.
The High Court Enforcement Officers Association say they first asked the MoJ for clarity on VAT in 2014. Last week the MoJ wrote saying that they support the HMRC position that VAT is payable by creditors and not debtors. They also said, however, that “there are cases where this may be recovered from the debtor as an enforcement cost”. When asked, in what cases this may be recovered? they simply responded with - “we will ask the new government to consider the matter and issue guidance.”
A serving government is not needed to clarify this issue as a change of policy is not being sought, but rather a clarification of an existing policy is being requested. To leave this matter unresolved for even a few additional weeks is totally irresponsible considering the potential impact.
My experience of dealing with the MoJ over the past 20 years is that they only work to their own timetables and agenda. I’m afraid, that if the industry is to protect itself and its clients from complaints, it is going to need to push the MoJ to make a decision on this matter through the Courts. Until then, the confusion continues and a variety of charging policies still exist.