Tax Cases

Road fuel

In proceedings against the UK similar to those taken in EC Commission v Kingdom of the Netherlands (Case C-338/98) the Advocate General has delivered his opinion recommending that the European Court of Justice should 'declare that by granting taxable persons the right to deduct VAT in respect of certain supplies of road fuel to non-taxable persons contrary to Articles 17 and 18 of the Sixth Directive' the UK had failed to fulfil its obligations under the EC Treaty. The ECJ has yet to deliver its judgment but it normally follows the opinion of the Advocate-General and is likely to in this instance given the decision in The Netherlands.

Dave Jordan independent VAT consultant said that the result of the decision would be that 'businesses would not be able to recover VAT on the fuel element of mileage...