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High Court, in answer to a case stated from the Tax Appeals Commissioner, determines that clamping release fees were subject to VAT on the basis that they constituted economic activity and were not damages for trespass or breach of contract.
Whether VAT applies to dlamping release fees charged by the appellant – respondent claims such fees subject to VAT – initial hearing by Tax Appeals Commsisioners – concluded that monies paid to release clamps comprise payment as damages in lieu of trespass and/or breach of contract – thus not subject to VAT – Court holds that monies paid to release clamps – parking at appellant’s car parks is subject to the risk of clamping if the rules placed on car park’s are violated – fines are specific – defined process based on economic decisions, not ex gratia payments – reciprocal performance of duties by all parties involved – terms and conditions of NCPS for the provision of its services goes to the argument that clamping and its release fees constitute an economic activity - clamping is thus an economic activity – not damages for trespass and/or breach of contract – damages requires a third party, the Court to adjudicate or the threat of proceedings – NCPS takes into account clamp release fees in its commercial arrangements and contracts - Commissioner thus incorrect in law to determine that clamping release fees not subject to VAT – Counsel asked to obtain instruction before final order is made
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