Fleet News

High Court set-back over fleet hopes for VAT payback

FLEET operators who had pinned their hopes on reclaiming millions of pounds in VAT paid on delivery charges have suffered a serious setback in the High Court. Justices this week reversed an earlier VAT Tribunal ruling which upheld BT's claim that the delivery charges it paid on its fleet vehicles should not be subject to VAT.

BT estimated that it could claw back as much as £1 million a year from Customs on its annual purchases of some 2,000 vehicles and several fleets are understood to have filed protective claims for the amounts outstanding. But at the appeal hearing, Mr Justice Dyson overturned the ruling, saying that the VAT Tribunal's interpretation of the European Sixth Directive governing VAT on incidental transport expenses was incorrect.

Accountant Ernst & Young fought the case on behalf of BT and immediately requested leave to appeal against the decision, which was granted. The next hearing - at the Court of Appeal - is unlikely to be heard until the end of the year.

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