Any ideas what I can expect?
They are obliged to respond to your response to the LoC. They will use a boilerplate stock answer which does not explain the VAT questions asked. When they do respond, you can then report them to HMRC for suspected VAT fraud (in the £millions).
We advise everyone to report VAT concerns involving the conduct of the legal and Debt Recovery firms operating as parasites clinging limpet-like to the 'rogue' private parking industry.
The report in your case specifically concerns Moorside Legal because the attached evidence (their response to the VAT questions) is about their failure to confirm whether consumers are being unlawfully hit with the VAT element of their added 'fees'.
This is not about parking charges (these cannot exceed £100). It is all about the added £70 admin/DRA costs that the DLUHC called 'extorting money from motorists'.
These third party debt collectors include Moorside Legal, BW Legal, DCB Ltd, DCB Legal, Gladstones Solicitors, Empira, TNC, CIS, Trace Debt Recovery, ZZPS, Debt Recovery Plus, QDR solicitors, CST Law, Elms Legal and others who are listed as members of the BPA and/or IPC Approved Operator or approved debt firms.
Because the concern is that they steadfastly refuse to answer questions about the VAT on their DRA fee, it is now widely suspected that some or all of the private parking industry specialist Debt Recovery firms (including legal firms) may be operating as follows.
Either:
(a) not paying HMRC the VAT element on the £60 or £70 per PCN 'admin fees' that they charge for 'debt recovery'. This amounts to £multi-millions p.a. due to parking cases now exceeding well over 12m DVLA look-ups per year. Within weeks, £70 per PCN is added and aggressively demanded. 90% of those cases that result in court claims include multiple £70 'fees' that the parking operator clients have never paid and appear to be unjust enrichment of the DRAs;
or
(b) including VAT within the fixed £70 'fee' which they describe as "our costs". This has the object or effect of making the consumer pay the VAT, which HMRC has already stated is unlawful in cases of enforcement or debt recovery fees.
The service supplied by a debt collection agency is a single composite supply, the core of which is debt collection, which is specifically excluded from the finance exemption, and is thus taxable:
https://www.gov.uk/hmrc-internal-manuals/vat-finance-manual/vatfin3255You will have given Moorside Legal a chance to clarify what they are doing in terms of VAT on what they call "our costs" but they will have swerved the questions.