Friday, 29 May 2020

BT looks to reclaim >£90 million in VAT via decade-old court case

by Harry Baldock, Total Telecom
Thursday 02 April 20

The operator asked that the case to be reopened back in August last year and on Monday their wish was finally granted

BT has reopened a legal case from over 10 years ago, arguing that HM Revenue & Customers (HMRC) owes them £91.8 million, plus interest, in overpaid VAT.   It was back in 2009 that BT first made the claim for the VAT repayments…

BT has reopened a legal case from over 10 years ago, arguing that HM Revenue & Customers (HMRC) owes them £91.8 million, plus interest, in overpaid VAT.
 
It was back in 2009 that BT first made the claim for the VAT repayments, arguing that, for a period of nine years between 1978 and 1989, it had paid the standard VAT rates on its supplies to customers, even though in some cases the customers had failed to pay for those goods. In such cases, BT claims it should be entitled to reclaim the VAT via ‘bad debt relief’.
 
However, the government disagreed, arguing that the letter of the law said that the VAT refund can only be claimed in situations where the customer had declared insolvency. Naturally, this dispute became more and more convoluted, passing through various regulatory bodies and ending up at something of an impasse. 
 
In August of last year, BT asked the High Court to lift the stay on its case, and Justice Fancourt finally agreed to do so on Monday. 
 
Before progress can be made, however, the court will first need to rule on HMRC’s strike-out application, which it made back in 2017 and has yet to be reviewed. Given the pandemic, it seems unlikely that this case will get underway any time soon and it could yet be years before a definitive conclusion can be reached.
 

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