Last week the Government announced a three-year limit on any backdated VAT claims from the fleet industry as it fought to avoid a potential £15 billion payout in a legal battle over VAT paid on company cars currently being waged by TC Harrison, Allied Domecq and the Royal Bank of Scotland (Fleet News July 26).

As the legal battle made its way through the courts fleets were being urged to lodge protective claims which would allow them to claim back VAT as far as 1973 if the Government lost the protracted fight over VAT on company cars. However, after a number of queries from accountancy firms and lawyers, Customs confirmed that the three-year cap applied to ALL backdated claims.

Deloitte and Touche VAT partner Sue Rathmell said: 'This is completely unfair. It is a very fine line but Customs & Excise thinks it can get away with it. We've got lawyers looking at the position at the moment and it could ultimately be settled in court.' Rathmell added that the more opposition Customs received to the move to clampdown on potential fleet refunds the more likely it was to alter its stance.