Debenhams claims landmark VAT victory

Debenhams claims landmark VAT victory

High street retailer, Debenhams, has won a landmark VAT case which Customs & Excise claims could ultimately cost the government as much as £300m.

Link: Customs triumphs in VAT retail battle

In a ruling handed down at the High Court today, Debenhams, won the right to treat debit or credit card handling fees as exempt from VAT.

‘Today’s decision has been eagerly awaited by the retail industry and will act as a test case for many of the UK’s largest retailers, said Sue Rathmell, VAT director at Deloitte. ‘The scheme is estimated to have been implemented by over 70 retailers.’

She warned that retailers should expect a ‘long fight’ however, as Customs is expected to lodge an appeal, with the result of the case possibly ending up at the European Court of Justice.

Today’s case overturns last years decision by an independent VAT tribunal which blocked what Customs saw as a VAT avoidance scheme. ‘Any retailer who has not yet implemented the scheme should consider doing so now,’ said Rathmell.

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