Britain has been landed with a bill for tens of millions of pounds in uncollected tax back as far as 1994 because of the decision, but the Treasury has promised not to pass it on to motorists.
The european ruling also applies to Ireland and the European Commission’s real target France, which has more tolls than anywhere else in Europe and faces back payments of hundreds of millions of euros.
The government today announced it is drawing up a scheme to protect motorists from the consequences of the judgement.
In a statement Customs said: ‘We have always opposed the principle of charging VAT in this area and fought hard to keep all toll charges free of VAT. We are determined to protect motorists from the impact of this unwelcome ruling.’
Customs is now holding urgent consultations with operators of those tolled bridges and roads affected to devise a scheme of government support to offset the cost of VAT.
Prime minister Tony Blair yesterday cancelled his planned trip to Yorkshire because of the crisis hitting the UK’s roads. Disgruntled lorry and taxi drivers have vowed to continue their blockade of pertrol suppliers in an effort to force the government to give motorists a better deal. Anger has so far focussed on the ‘double tax’ on petrol rather than rising OPEC oil prices.
Currently VAT is levied on the duty added to petrol as well as on the petrol itself.
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