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Inchcape hopes for £30m VAT repayment

Inchcape plc has announced that trading in a number of its markets has been more favourable than anticipated, while the group's UK operations are trading broadly in line with expectations. Better-than-predicted results are expected from Inchcape's overseas operations in Greece, Belgium, Australia, Hong Kong and Singapore.

Excluding the impact of one-off events reported in those overseas markets, profit before tax is expected to be slightly ahead of the current market consensus for Inchcape of £127.7m. The tax rate will be lower than last year's as it benefits from a recent ruling in relation to a tax efficient financing structure. Inchcape's financial year ends 31 December, and its report to shareholders is due in March next year.

Following changes in case law Inchcape submitted a retrospective VAT claim in June this year for the recovery of overpaid VAT. Negotiations with HM Customs & Excise continue, and Inchcape says, “While progress has been made the claim has yet to be finalised”. Inchcape expects a final settlement of at least £30.0m, including interest, while admitting that the status of the negotiations is such that it is difficult to predict the final outcome with any certainty.

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