News & Blog

Change for VAT on High Court Enforcement Fees Imminent

June 14, 2021

Category: News

A change in practice on charging VAT on High Court Enforcement fees, payable under Writs of Control, is set to come into effect soon.

Ahead of new guidance from the UK Government, prompted by an ongoing court case, the High Court Enforcement Officers Association (HCEOA) is recommending a change in the treatment of VAT on High Court Enforcement fees. Read the association's public statement here.

This change is particularly relevant to cases where the judgment creditor is VAT registered.

How the VAT change will affect Andrew Wilson & Co. clients

If the judgment creditor can recover VAT from HMRC:

  • Where a judgment creditor is VAT registered, we will not recover VAT on our fees from the judgment debtor
  • Instead, we will deduct a sum equivalent to the VAT element of our fees from the funds recovered from the judgment debtor and pay this to HMRC
  • An invoice addressed to the judgment creditor marked ‘paid’ will be forwarded to the judgment creditor/their representative, along with the balance of funds they are due
  • The judgment creditor can then claim this VAT from HMRC in the normal way

If the judgment creditor cannot recover VAT from HMRC:

  • We will continue to collect a sum equivalent to the VAT from judgment debtors
  • This sum will continue to be paid to HMRC
  • In line with expected Government guidance, we will issue a VAT invoice to the judgment creditor

At Andrew Wilson & Co., we are gearing up our system to roll this change out on 2nd August 2021. Our clients will need to notify us whether the judgment creditor is VAT registered before we proceed with enforcement.

We will be in touch with all our clients over the coming weeks to verify VAT registered status to ensure the change is rolled out as smoothly as possible.

If you have any queries regarding this industry change or want guidance on how this will affect you, please get in touch with your dedicated Andrew Wilson & Co. contact or call the team on 0161 925 1800 and one of our Directors will be pleased to assist you.

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