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.

High Court enforcement activity is being undertaken in an appropriate, flexible and sensitive manner that reflects the challenges we are all facing as a result of the ongoing Covid-19 pandemic.

The Association has developed a best practice Covid-19 plan.

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