The Government is committed to ensuring that there are fair and sustainable enforcement processes available to judgment creditors for the enforcement of judgment debts and fines. We also want to ensure that those facing enforcement action, particularly the most vulnerable in society, are treated fairly.

The Government notes the findings of the 2023 review of the Taking Control of Goods (Fees) Regulations 2014 and will set out the way forward shortly.

The Government supports the important work undertaken by the Enforcement Conduct Board to ensure that people facing enforcement action are treated fairly. We are actively considering whether further legislation is required to ensure appropriate oversight of enforcement firms and enforcement agents using the Taking Control of Goods procedure.

The Government will set out its approach in due course.

On 17 July 2023, following a review of the fees that enforcement agents and High Court Enforcement Officers can recover when using the taking control of goods procedure, we announced that we intended to amend the Taking Control of Goods (Fees) Regulations 2014 to uplift such fees by 5%. We also announced that we would consult on reforms that aimed to encourage earlier and cheaper settlement of debt. We said that we would implement any reforms and the fee uplifts at the same time, in order to balance the need to ensure that there is a sustainable enforcement industry with making sure that those facing enforcement action are treated fairly. That consultation closed on 6 December 2023.

We received detailed feedback from a wide range of stakeholders and the Enforcement Conduct Board have been consulted. A response to the consultation will be published and a timetable for implementation will be announced in due course.

On 17 July 2023, following a review of the fees that enforcement agents and High Court Enforcement Officers can recover when using the taking control of goods procedure, we announced that we intended to amend the Taking Control of Goods (Fees) Regulations 2014 to uplift such fees by 5%. We also announced that we would consult on reforms that aimed to encourage earlier and cheaper settlement of debt. We said that we would implement any reforms and the fee uplifts at the same time, in order to balance the need to ensure that there is a sustainable enforcement industry with making sure that those facing enforcement action are treated fairly. That consultation closed on 6 December 2023.

We received detailed feedback from a wide range of stakeholders and the Enforcement Conduct Board have been consulted. A response to the consultation will be published and a timetable for implementation will be announced in due course.

On 17 July 2023, following a review of the fees that enforcement agents and High Court Enforcement Officers can recover when using the taking control of goods procedure, we announced that we intended to amend the Taking Control of Goods (Fees) Regulations 2014 to uplift such fees by 5%. We also announced that we would consult on reforms that aimed to encourage earlier and cheaper settlement of debt. We said that we would implement any reforms and the fee uplifts at the same time, in order to balance the need to ensure that there is a sustainable enforcement industry with making sure that those facing enforcement action are treated fairly. That consultation closed on 6 December 2023.

We received detailed feedback from a wide range of stakeholders and the Enforcement Conduct Board have been consulted. A response to the consultation will be published and a timetable for implementation will be announced in due course.

The draft guidance on the treatment of VAT on High Court Enforcement fees reflects the current law, both in the 2014 Taking Control of Goods (Fees) Regulations 2014 and at common law.

The 2014 Regulations made changes to the fees provisions in the HCEO Regulations 2004. Both the 2004 HCEO Regulations and 2014 Regulations allow for fees to be charged to the debtor. The 2014 Regulations were not intended to change the previously understood position at common law in relation to the recoverability of enforcement costs properly incurred including VAT where the creditor cannot account for it with HMRC, for example because they are not VAT registered.

Some of the authorities in support of the proposition that a debtor may be pursued for a creditor’s enforcement costs and as to the continuing relevance of the common law to this area are Montague v Davies, Benachi & Co [1911] 2 K.B. 595 and Business Finance Ltd v Bellagio Hospitality WB Ltd [2019] EWHC 1920 (QB). Disbursements are dealt with separately under the regulations.

As the draft guidance reflects the current law we do not envision additional costs being passed on to the debtor which are not included in the 2014 Regulations.

The Government proposes to publish the guidance on the treatment of VAT on High Court Enforcement fees as soon as possible.

Creditors are the recipients of High Court enforcement services, which are subject to VAT. Therefore, 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.

However, there are circumstances under the Taking Control of Goods legislation, where this cost may be recovered from a debtor as part of enforcement costs. The Ministry of Justice is currently 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 as soon as possible.

As Chris Philip set out in his Answer of 6 February 2020 to Question 9643, the Ministry of Justice intends to publish guidance on the circumstances and manner in which a cost equivalent to VAT may be recovered from a debtor under the Taking Control of Goods legislation, as soon as possible.

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.

Debt collection services carried out by High Court Enforcement Officers are subject to VAT according to the normal rules and any VAT due is payable by the creditor who receives the service. The debtor is not required to pay the VAT.

HM Revenue and Customs are working with the Ministry of Justice, which is responsible for the Taking Control of Goods (Fees) 2014 Regulations, to ensure that VAT rules continue to be applied correctly.