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Tax payer to foot toll VAT bill

OPERATORS OF Britain's privately financed road bridges and tunnels are expected to be allowed to reclaim VAT levied on tolls as a result of a European Court of Justice ruling on Tuesday.

Customs & Excise said it was planning to provide 'government support' to crossing operators as a result of the ruling so tolls would not have to increase.

As NCE went to press on Tuesday it was unclear whether toll operators would have to add 17.5% VAT onto existing tolls or whether they would have to absorb the charge themselves.

Second Severn Crossing operator Severn River Crossing already has a clause in its concession agreement allowing it to reclaim cash if there is a change in the VAT regime.

The European Court judgement - which confirms a preliminary ruling by the European Court of Justice's advocate general (NCE 3 February) - affects Britain, France and Ireland. It appears to exempt public bodies that operate tolled infrastructure. This could mean operators of the Mersey and Tyne tunnels and the Humber Crossing, which are owned by the public sector.

Privately run toll roads include the Second Severn Crossing, the Dartford bridge and tunnels, and Skye Bridge.

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