Question to the Ministry of Justice:

To ask the Secretary of State for Justice, whether he is taking steps to compensate debtors who have been charged VAT on debts under the incorrect application of the Taking Control of Goods (Fees) 2014 Regulations.

As the recipient of High Court enforcement services, which are subject to VAT, creditors are liable for VAT on the fees charged by High Court Enforcement Officers. Creditors who are VAT registered are in turn able to recover VAT from HMRC, subject to the normal rules.

Under the Taking Control of Goods legislation, however, there are circumstances where this cost may be recovered from a debtor as part of enforcement costs. The Ministry of Justice is in the process of clarifying the circumstances and manner in which a cost equivalent to VAT may be recovered from a debtor and intends to publish guidance on this shortly.