The decision is likely to mean VAT will be added onto road toll prices when the ruling – which usually agrees with the court’s judgement – is confirmed in the summer. For example, a car driver crossing the Severn Bridge would have to pay an extra 75p on the current £4.20 charge.
The AA said: ‘This is yet another cost for the motorist and we, like the Government believe the VAT shouldn’t be levied at all. The Government thought it had found a loophole in the European Law and had a good case for avoiding the charge, but unfortunately to no avail.’
Operators will also be faced with the need to supply VAT invoices to drivers, with all the compliance problems that follow, such as changes to accounting systems, tills and collection methods.
Road tolls set to increase after European VAT ruling, warns KPMG