The Scottish VAT and Duties Tribunal has ruled that dealer group Arnold Clark was entitled to be refunded the VAT it had over-paid on bonuses received from manufacturers for vehicles used in the group’s rental and leasing business.

The group had accounted for VAT on the bonuses according to HMRC guidelines at the time.

However, this policy was later ruled to be incorrect by the EU Court of Justice and Arnold Clark subsequently attempted to reclaim the over-paid VAT.