General Discussion

VCS Ltd v HMRC: Application pending to Court of Appeal

As many on here will know, HMRC found that Vehicle Control Service Ltd ( a company owned by Mr Simon Renshaw-Smith) were liable to pay VAT from 04/05 to 10/09 on parking charges collected from motorists.
VCS Ltd appealed this decision to the First Tier Tax Tribunal and attempted to argue that VAT was not payable as the charges were either “damages for breach of contract” or “damages for trespass"

The Tribunal found against them and ruled that VCS Ltd (and, by implication...all other private parking companies) had no authority to issue a charge in the first place as VCS Ltd had no occupational right to the land that they patrolled and consequently; could not enter into a contract with the driver.

They ruled that monies received from motorists by VCS Ltd were in fact “services to the landowner” with whom VCS Ltd had a contract to provide parking control services. It was made clear from the First Tier Tribunal that there was no contract between VCS Ltd and the motorist.

VCS Ltd appealed this decision to the Upper Tribunal (Tax & Chancery Chamber) where the case was considered on 6th March 2012 before Judge Roger Berner and Judge Nicholas Aleksander. They concluded that the First Tier Tribunal has been correct in that there was no contract between VCS Ltd and the motorist and as a consequence, VCS Ltd had no right to claim damages in trespass against motorists who parked in breach and accordingly, that the penalty charges did not constitute damages.

The Upper Tribunal dismissed the appeal.

Firstly it should be noted that the Upper Tribunal was established under Section 3 of the TCE Act 2007 as a Superior Court of record and accordingly, its decisions establish precedents which are bindings on lower courts.

Yesterday, VCS Ltd have appealed the Upper Tribunals Order dated 2nd May and the matter is now listed at the Court of Appeal on 4th or 5th May 2013. Closer to the date one of these two dates will fall away.

The case has been listed with a time estimate of 4 hours