AM Online

Overpaid VAT ruling ‘hugely significant’

Accountants have urged dealers who believe they are owed VAT overpaid on demonstrators between 1973 and 1996 to submit a claim, following a House of Lords ruling at the end of January.

The judgement in the Fleming and Condé Nast cases has ended a battle which began in 1996, when HM Revenue & Customs announced that claims for overpaid VAT, including claims which had already arisen, must be submitted within three years of the tax return. It instantly cut off dealers’ previous unlimited right to reclaim overpayments as far back as 1973, when VAT was introduced.

The Law Lords have now ruled that the amended regulations breached European law.

Gerry Myton, of PKF, said: “This is hugely significant. Overpayments of VAT before the introduction of the three-year cap are still live, so it’s not too late for motor retailers to submit claims.”

Mike Jones, of Trevor Jones Accountants, agreed: “In our opinion this means that dealers who made a claim which was unfortunately rejected will now see their payment, and dealers who did not make an original claim are now likely to be eligible for at least part payment.”

Jason Collins, of law firm McGrigors, said: “The fight may not, however, end here. Many taxpayers will look to be compensated with full commercial rates of interest calculated on a compound basis, rather than the low simple rate of interest provided for under statute. Given the age of the claims, compounding could result in an interest award more than five times greater than the tax itself.”

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Comment as guest

Login  /  Register


No comments have been made yet.