Not A Total Write-Off

DAVE JORDAN considers the effect of the European Court of Justice's recent ruling in EC v UK on road fuel expenses.

IT WAS NO surprise that the European Court of Justice followed the Advocate General's opinion in ruling against the UK in the recent case European Commission v UK (Case C-33/03) (decision released 10 March 2005) on the claiming of input tax on employee mileage allowances. This article examines the reasons why the court reached the decision it did and what action businesses can take to continue to benefit from the recovery of VAT on road fuel and items of expenditure when the purchase is made by an employee.

The Netherlands case

The European Court first took proceedings against the Netherlands ( Case C-338/98 ) and judgment was delivered on 8 November 2001.

In that case the issue was whether an employer is entitled to...