TaxPersonal TaxGovernment faces bridge toll fines

Government faces bridge toll fines

The British government is facing a possible order to pay massive recurring fines of as much as €100,000-a-day (£61,500) because it has not notified the European Commission about any implementation of a court order to levy VAT on privately operated road and bridge tolls.

Because many of these road charging systems in the UK are managed by private companies, the European Court of Justice in 2000 ruled that their exemption from VAT was illegal under the EUås sixth council directive.

Indeed its judges went further, saying that the UK should repay the VAT that should have been levied since 1994, so as not to cause financial loss to Brussels (which commands a slice of national sales taxes).

However, the commission claims that Britain has so far ‘failed to notify’ it of any actions to comply with the judgement, and so has launched the first stage of enforcement proceedings that can lead to a fine, payable until judges agree that a member state has carried out their wishes.

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