Sellers of fast food could be in for bumper VAT refunds

Sellers of fast food could be in for bumper VAT refunds courtesy of a new European Union ruling, according to tax advisers.

The European Court recently ruled that Manfred Bog, a German sausage seller, is exempt from paying full VAT as the snacks are easy to prepare and therefore do not come under the category of catering.

Nachos and popcorn also fall into the same category and Chantrey Vellacott DFK has now suggested that the UK government could be forced to fork out millions to sellers who have paid too much VAT. The director of VAT services at the company said it is inevitable that large claims with be made for overcharged VAT and the government may have to implement a change in the law.

Meanwhile, accountants may be interested to learn that Caroline Lucas, the Green MP, has unveiled a bill that would force banks to disclose the amount of tax they pay worldwide.

If the bill becomes law, banks will also have to divulge the accounts of firms that fail to submit tax returns to HMRC, within a deadline of 90 days.

James Roberts, a partner at leading international law firm Barlow, Lyde and Gilbert, said the bill was drawn up as a result of all the publicity surrounding Barclays Bank’s low corporation tax bills. However, he does not think the proposed bill will have much effect on the current tax regime.

HMRC already has a lot of powers to deal with companies it feels are indulging in tax evasion or avoidance, he added.

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