Car park firm appeals decision on VAT for clamp fees

A CAR park management company has appealed a decision that Revenue is entitled to some €1.7m in VAT for fees to have cars de-clamped in private car parks in places such as apartment complexes, churches and hospitals.

Nationwide Controlled Parking Systems (NCPS) brought the appeal over a High Court decision last year that a Tax Appeals Commissioner was wrong to find VAT was not chargeable on the fee.

NCPS yesterday asked a three-judge Court of Appeal (CoA) to overturn that decision. The Revenue Commissioners oppose the appeal and say the decision should stand. The CoA reserved judgment.

In 2014, NCPS appealed the refusal by Revenue of a repayment claim of €1.77m for VAT paid on clamping release fees for periods in 2009 and 2013.

Revenue had refused the repayment claim on the basis the fees were subject to VAT under EU and Irish tax law.

A Tax Appeals Commissioner, who is independent of Revenue, overturned the refusal. The commissioner determined clamping release fees comprise payments “in the nature of or in lieu of damages for trespass”.

The fees were not a “supply of services for consideration” which are subject to VAT, she said. She also said the fees were generated in the context of enforcement of parking against “trespassing motorists”.

A motorist was considered a trespasser if they did not have a permit, pay the appropriate fee or were illegally parked.

Last July, the High Court found the commissioner was incorrect in law.

Yesterday, Frank Mitchell SC, for NCPS, urged the CoA to overturn that decision. He argued the commissioner was correct on grounds including that a motorist pays a fee as a result of “an anterior parking infraction” which meant de-clamping was not a supply of services such as would normally attract a VAT payment.

Grainne Clohessy SC, for Revenue, said clamping release fees were subject to VAT because under Irish and EU law it was a payment for an economic activity.

The fees were not a ‘supply of services’ subject to VAT