Fleet News

Appeal court bid in long-running VAT recovery case

THE battle over the VAT treatment of company cars continued at the Court of Appeal this week. RoyScot Trust, Allied Domecq and dealer group TC Harrison contested rules preventing recovery of VAT on vehicles used for business purposes.

With an estimated £15 billion at stake, the protagonists have gone through successive courts after a VAT Tribunal rejected their challenge to Customs & Excise's interpretation of the European Commission's Sixth Directive on VAT dating back to 1973. The vehicles are demonstrator, contract leased and short term vehicles which the companies claim are incorrectly treated for VAT purposes.

A High Court judge last year threw out the case and refused leave to appeal against the decision. Lawyers had that overturned, paving the way for this hearing. A decision is expected within three weeks. It is unlikely that the Court will find in the companies' favour, but they hope to appeal to the European Court of Justice for a final ruling.

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