Fleet News

VAT pledge on road tolls

THE Government has pledged that fleet costs will not soar when VAT is charged on privately-operated road tolls from next month.

Economic Secretary to the Treasury John Healey said many business drivers will be able to recover the VAT charge and claimed this could actually make their costs cheaper.

A ruling by the European Court of Justice (ECJ) means that from February 1, tolls payable to private sector operators for use of roads, road bridges or road tunnels will be charged VAT.

It could involve 10 crossings and bridges in the UK, including Clifton Suspension Bridge and the Severn river crossings.

Healey said: 'When the European Court of Justice ruled that these tolls must bear VAT, the Government stated its intention that toll prices should not increase on account of the ECJ ruling.

'We remain firmly committed to this and motorists should not see any increase in the toll charges they pay as a result of the VAT change. Furthermore, many business motorists will be able to recover the VAT content of the tolls they pay, making their actual costs cheaper.'P> The Government adds that the ruling means toll charges collected by public bodies can remain free of VAT, while other toll charges must be taxed.

In a statement, the Government added: 'From February 1, VAT-registered businesses will be entitled to recover the VAT charged on tolls, provided they have made the journeys in question in connection with their taxable activities and they hold the necessary evidence.'

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