VAT ‘to hit UK public spending’
Monday June 29, 2009
A High Court ruling made on VAT last year could be responsible for creating a "black hole" in government finances, it has been revealed.
The Telegraph reports that Westminster may lose around £7 billion after it was confirmed that firms can claim back any overpayments made to the HM Revenue and Customs since 1973.
It is believed that the problem could make a major impact on the government’s deficit for public finances and Lord Oakeshott, a Treasury spokesman for the Liberal Democrats, has revealed concerns over the issues.
"This is another gaping hole in Britain’s already overstretched public finances," he told the newspaper.
"It is yet another body blow to Darling’s credibility and Britain’s credit rating."
The European Commission recently called on the UK to change its VAT regulations in relation to aircraft transactions.