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GHA vat scam

Thursday, October 4th, 2007. Filed under - South Side, - Top Stories.

A VAT scam of gigantic proportions is being carried out by Glasgow Housing Association (GHA) claim owner occupiers who use the company as their factor.

The Glasgow Save Our Homes Campaign believes GHA has been charging 17.5% VAT on concierge and other mandatory services and repairs when those items should have been zero rated.

Campaigning homeowners across the city have demanded a public apology and a refund of what they’ve paid in the past four years. More than 100 letters of complaint have been sent to GHA – the largest social housing organisation in the U.K.

The campaigners say that GHA was told by HM Customs and Excise in 2003 that they could zero-rate all mandatory services. Instead the organisation – which is a registered charity - has charged the 17.5 per cent tax on all services. VAT must be paid direct to Customs and Excise first, then any exemptions can be claimed back.

Said Sean Clerkin, chair of the Campaign, ‘This amounts to a VAT scam, where the GHA has deliberately overcharged homeowners so they could claim some of the money back for themselves. This is corporate greed. We want the charging of VAT on all mandatory services stopped immediately and refunds backdated to 2003 for all homeowners.’He added, ‘I would encourage all homeowners to write to the GHA demanding that all mandatory services are zero-rated and that backdated charges are refunded.’ 

A spokesperson for the GHA said that the charges would be looked at as part of an upcoming review. ‘GHA is currently undertaking a root and branch review of all our rent and service charges for tenants and owners alike. As a registered charity, GHA’s primary obligation is to protect the best interests of our tenants. We must always ensure that tenants’ rents are not being used to subsidise the cost of services to owners. Nevertheless, we do recognise our responsibility to the owners who are factored by GHA and we take steps to treat them as fairly as possible at all times. That’s why we are currently paying backdated interest to owners following our appeal on the VAT payable on overcladding and insulation works, despite the fact that we are unlikely to recover most of the interest from HM Revenue and Customs.’
GHA was awarded a performance fair ‘C’ grade by Communities Scotland in September in the first indepth, independent, assessment of performance since it took ownership of 80,000 houses from Glasgow City Council in 2003. The housing megalith has till mid November to respond with strategies to remedy the weaknesses identified by Communities Scotland. These include being ‘slow to understand the issues facing homeowners’ and ‘not communicating or handling their complaints or queries well.’