The Automobile Association has slammed as ‘unwelcome and unjustified’ a preliminary judgement by the European Court that the UK is in breach of its obligations for not including VAT on tolls such as those used in France (above) where truckers are blocking motorways over extended working hours and fuel prices. The decision could see VAT added to road toll prices when the ruling – which usually agrees with the Court – is confirmed in the summer. A car driver crossing the Severn Bridge would 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 need to supply VAT invoices to drivers and face compliance problems, such as changes to accounting systems, tills and collection methods. Tony Lynne, KPMG head of indirect tax, said: ‘Toll bridges and tunnels are operated by a range of bodies, including local authorities. Private-sector operators now need to consider whether the terms of contract under which they collect tolls allow them to increase their prices to add VAT.’
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