House of Lords VAT decision to impact on car dealers

According to the RMI’s National Franchised Dealers Association (NFDA), motor retailers who have been trying to reclaim VAT should now see their claims paid following a House of Lords judgment that has discredited a claim deadline imposed by Her Majesty’s Revenue and Customs (HMRC).

The House of Lords has decided that pre-existing rights to VAT before 1 May 1997 are protected despite a three-year cap on claims introduced by HMRC. This is the latest in a series of judgments surrounding VAT. A decision made by the House of Lords last year on Sempra Metals led to reclaims of compound interest on VAT being permitted.

NFDA Director Sue Robinson commented: ‘This is good news for dealers who have put claims in that missed the original deadline of 30 June 2003. These should now be paid on the basis of the judgment.’

Robinson continues: ‘Those few businesses eligible that have not yet made claims should do so as soon as possible, before HMRC put legislation in place to close this gap.’

She adds: ‘For those dealers who have already submitted claims following the earlier hearings of this case, the House of Lords decision means that these claims should be paid without further impediment.’