HMRC in £9m VAT payout to Fairpoint
Tribunal's ruling that nominees' and supervisors' fees are VAT-exempt prompts payout
A £9m VAT PAYOUT has been awarded to debt managers Fairpoint from the taxman.
The payout follows an earlier VAT tribunal decision against HMRC in the Paymex case, which found that nominees’ and supervisors’ fees in consumer individual voluntary arrangements were exempt supplies.
Fairport has also announced a £13m asset-based revolving credit facility deal with PNC Financial Services UK, replacing its existing committed £8m facility which was due to expire in December.
The facility has a four-year maturity and has been secured against the group’s individual voluntary arrangements and debt management plans. The amount drawn down against the existing bank facility was £4.5m, which has been transferred to PNC.
Chris Moat, CEO of the Fairpoint, said: “The new facility, together with the proceeds of the VAT reclaim, provides the Group with significant liquidity and a longer term financing structure, which will enable us to continue our strategy of both organic and acquisition investments in order to consolidate our market position and diversify into related activities.”
The ruling means that insolvency practitioners should ensure that their firms stop charging VAT on invoices for fees and payments in IVAs immediately as these are exempt supplies.
