Fleet News

5,000 fleets await crucial VAT ruling

MORE than 5,000 fleet operators are awaiting the outcome of the protracted legal battle over the VAT treatment of company cars.

The news comes as leading accountants step up their campaign against the Government's three-year block on backdated VAT claims with the publication of the Waelbroeck Report, which concludes that the Treasury's decision to restrict backdated VAT claims to just three years (Fleet News, July 26) is contrary to EU law.

If upheld, the three-year cap on claiming back VAT which was wrongfully collected in the first place would slash the millions of pounds the Royal Bank of Scotland, Allied Domecq and T C Harrison stand to gain if their protracted legal battle ends in victory (Fleet News, May 17). The protagonists are currently awaiting a hearing date at the Court of Appeal after two successive defeats in lower courts, but are committed to taking their case to the European Court of Justice if necessary.

The Waelbroeck Report is due to be put before Parliament this week as accountants continue their campaign to force the government to extend the block to at least six years to bring it into line with the taxman's rights to demand unpaid taxes. In the meantime, Customs is withholding any payments to appellants successful at the VAT Tribunal until the legislation making the three-year cap law is enacted as part of the Finance Act next year.

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