Doncaster-based DFS Furniture is awaiting a ruling from a precedent-setting European court case over Customs & Excise’s interpretation of VAT rules on tax-free credit used by many DFS customers.
The case involves liquidated furnishing company Primback which first took Customs to court in 1993 to claim back Pounds 6m worth of VAT paid on its loans.
The House of Lords handed the case to the European Court of Justice two years ago after Customs disputed a 1996 Court of Appeal finding that the price paid for goods sold on interest-free credit was in fact payment for credit.
Lord Kirkham, the DFS executive chairman, has said there is ‘little chance’ it would be able to keep the money, and will be forced to pay the outstanding tax.
He has, however, indicated that there is a small chance the company could keep about Pounds 15m of the VAT money, as the earlier stages of the dispute might be ruled out of time.
Kirkham’s comments came as DFS posted strong interim results for the second half of 2000. DFS reported record profit before tax of Pounds 24.4m on sales of Pounds 192.6m.
Lord Kirkham said he was confident the strength of DFS would be reflected in another year of profitable growth.
Taxman lines up early exit from doomed Concentrix tax credits deal, as HMRC faces intense scrutiny from MPs
Crowe Clark Whitehill , the top 20 accountancy firm, has announced the promotion of Chris Mould to partner
The latest opinions from Accountancy Age on Making Tax Digital, and outline plans to evolve the UK's corporate governance regime
Five million taxpayers are ow using digital personal tax accounts (PTA) as part of the making tax digital strategy, HMRC said