Latest News and updates from HCEOA

The High Court Enforcement Officers Association (HCEOA) has welcomed this week’s publication of a new Ministry of Justice guidance document entitled VAT on High Court Enforcement Officer Fees.

The Ministry of Justice has released the new official guidance, which clarifies how VAT on High Court enforcement fees should be treated, following a range of discussions with the High Court Enforcement Officers Association and other representatives of the profession over several years.

Following consultation with the High Court Enforcement Officers Association the new document largely follows the draft Ministry of Justice guidance first issued in March 2020, and provides much needed clarity and direction on how VAT on enforcement fees should be treated.

It states that in cases where the creditor is VAT registered, VAT on any High Court enforcement fees should be charged to the creditor for any new cases from 13 October 2021. This should then be reclaimed by the creditor from HMRC in their annual VAT returns.

In cases where the creditor is not VAT registered, an amount equivalent to VAT on High Court enforcement fees will continue to be charged to the debtor, as it is currently.

This position reflects the recommendations that the High Court Enforcement Officers Association issued to its members earlier this year, which they are already following.

Alan J. Smith, Chair of the High Court Enforcement Officers Association, said: “This is very welcome news for our members and it is the culmination of discussions that have been going on for many years. I would like to thank all of our members who have been involved in helping to bring about this clarity around VAT on High Court enforcement fees since we first raised it in 2014. The association is very pleased to see that the Ministry of Justice is going to reflect the guidance in new legislation that will be brought before parliament.

“While we are pleased that the Ministry of Justice has finally provided much needed clarity for our members, historically we have made our position clear, and we continue to believe that a zero VAT rating on High Court enforcement fees would be the fairest option for both creditors and debtors. No debtor should have to pay VAT in any shape or form.”

The Ministry of Justice has said it intends to lay a Statutory Instrument in the near future to turn this new guidance into legislation by amending the Taking Control of Goods (Fees) Regulations 2014.

A new survey of court users has found that almost 99% support a greater freedom of choice – enabling them to use a High Court enforcement route – when recovering outstanding debts.

The call from court users comes following significant delays in the County Court system. The vast majority – 86% - of court users reported experiencing delays when using the County Courts, with many citing they have stopped trying to recover some debts altogether.

The High Court Enforcement Officers Association is backing the creation of a new enforcement oversight body proposed by the Centre for Social Justice (CSJ).

In a new report entitled ‘Taking Control for Good’, the CSJ has announced plans for a new body – the Enforcement Conduct Authority (ECA), which would provide independent, fair and formal supervision of enforcement.

The High Court Enforcement Officers Association (HCEOA) has written to all members with an updated recommendation regarding the treatment of VAT on High Court enforcement fees, ahead of expected new guidance from the UK Government.

The HCEOA has recommended to all members that their treatment of VAT on High Court enforcement fees should be changed as soon as is practical, and at the latest with effect from 1^st August 2021.

Residential evictions in England and Wales

The Government has confirmed that it does not plan to extend the emergency legislation banning enforcement agents from carrying out evictions beyond its expiry date of 31 May in England. This will allow High Court Enforcement Officers and their representatives to enter homes to carry out evictions in England from 1 June onwards.

The High Court Enforcement Officers Association (HCEOA), representing High Court Enforcement Officers (HCEOs) across England and Wales, has welcomed new members to its Board, including a new chair, following a successful, virtual annual general meeting.

Alan J. Smith was appointed as Chair of the Association after a serving on the HCEOA Board since 2008, including five years as treasurer and most recently in the role as Vice Chair for the last five years.

The High Court Enforcement Officers Association (HCEOA) has welcomed the Government’s new Breathing Space initiative, which comes into effect on 4 May.

Under the new scheme, interest, fees and enforcement can be frozen for up to 60 days people in problem debt, with further protections for those in mental health crisis treatment.

The High Court Enforcement Officers Association (HCEOA) has recommended that its members introduce regular rapid lateral flow testing for their enforcement agents to ensure the health and safety of both enforcement agents and the wider public.

While rapid lateral flow testing is not a legal requirement for enforcement agents, the Association feels that it is the responsible action to take for any agent visiting commercial or, when visits are permitted later in the summer, residential properties.

The High Court Enforcement Officers Association (HCEOA) has confirmed its support of the Housing Secretary’s recent announcement extending the ban on bailiff enforced commercial and residential evictions.

Under the new legislation, Residential tenants have been afforded additional protection with the previous six-month notice period and bailiff enforced eviction ban extended to 31 May.

High Court Enforcement Officers Association Chairman Andrew Wilson looks at how High Court enforcement can help deal with the backlog of outstanding civil enforcement cases caused by the Covid-19 pandemic.

This article first appeared in the February edition of Credit Management – the official magazine of the Chartered Institute of Credit Management.