De-clamping fees are subject to VAT, says appeal court

De-Clamping Fees Are Subject To Vat, Says Appeal Court
A car parking management company is liable for €1.7 million VAT on fees collected for its de-clamping service, the Court of Appeal has found.
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A car parking management company is liable for €1.7 million VAT on fees collected for its de-clamping service, the Court of Appeal has found.

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


NCPS provides parking control for places like apartment complexes, churches, schools and hospitals.

In 2014, it appealed to a Tax Appeal Commissioner the refusal by Revenue to repay a claim of €1.77 million for VAT paid on clamping release fees between November-December, 2009, and September-October, 2013.

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

The appeals Commissioner, who is independent of Revenue, found NCPS was entitled to repayment of the VAT.


The Commissioner determined clamping release fees comprise payments "in the nature of or in lieu of damages for trespass" and the fees were not a "supply of services for consideration" which are subject to VAT.

'Trespassing motorists'

The Commissioner 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.

Revenue then brought a High Court appeal on a point of law. The High Court found the Commissioner was incorrect in law.

NCPS appealed, urging the Appeal Court to overturn the High Court decision, while Revenue opposed the appeal.


The three-judge Court of Appeal in a judgment published on Wednesday, rejected the appeal.

The written judgment was authored jointly by Mr Justice Maurice Collins and Mr Justice Brian Murray. Ms Justice Caroline Costello agreed with the judgment.

The Appeal Court said the centrepiece of the NCPS argument as to why the clamping fees were not subject to VAT was that they were "in the nature of damages" for trespass and paid by vehicle owners to NCPS as such.

The Tax Appeal Commissioner erred in accepting this argument, the Court of Appeal said.

The correct legal characterisation of the transaction for de-clamping was that of "a service provided to the car owner" and that fee is properly regarded as subject to VAT, it said.

The appeal should therefore be dismissed, it said.

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