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HMRC internal manual

VAT Government and Public Bodies

Other local authority activities: miscellaneous (A to E): bailiffs

Local authorities have a statutory duty to collect Council Tax and normally use their own resources to do so. However, if they are unsuccessful in obtaining payment from defaulters they may use bailiffs to collect the arrears plus any statutory charges.

Bailiffs supply their services to the local authority and should invoice the authority not the debtor. If they retain any of the payment from the debtor this forms part of the consideration for the taxable service they supply to the local authority. The same applies to any other payments they retain and net off against the total charge. In addition to the statutory charges consideration for a bailiff’s services may include a commission based on the amount of the arrears due or collected.

The local authority can recover the VAT it is charged under section 33 (see VATGPB4000) because it relates to its non-business activity of collecting the Council Tax.