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Allen Blewitt, ACCA Chief Executive, said:

"The sums at issue here will have huge implications for governments across the European Union. EU finance ministers must meet and find a solution to ensure long-term sound tax policy. Without such a response, governments and businesses will face an extended period of uncertainty, with serious detrimental effects on the EU economy.

He added: "This case, though hugely significant, is not without recent precedent. In 1996, after Customs had been defeated on a series of cases concerning input VAT on cars - which threatened to cost the UK exchequer many billions of pounds - the UK government responded by putting a three-year limit on future claims, which significantly reduced the amount of money it was liable for. A similar response to today’s ECJ case, assuming the final judgement supports the Advocate-General’s opinion, is possible."

ACCA has already called on the UK government, in our recent tax manifesto, to undertake a programme of pro-active reform to ensure the UK tax system is fundamentally compliant with EU law, rather than reacting to ECJ cases on an ad hoc basis. The M&S case shows precisely why such an approach is urgently needed.

For further information, contact:

Ian Welch
Head of Corporate Communications
tel: + 44 (0) 20 7396 5729/07739 862928
fax: + 44 (0) 20 7396 5741

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