The High Court rules in favour of UK councils over VAT exemptions

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Judge dismisses legal challenge to overthrow VAT exemptions for UK councils

A High Court Judge has this week dismissed a legal challenge to overthrow VAT exemptions for UK councils who offer a trade waste collection service.

Monday’s ruling comes after a judicial review, which was heard in July, as an Upper Tribunal Tax and Chancery Chamber preliminary case.

The case was brought against HMRC in 2014, by The Durham Company, a north east recycling business.

The waste company, who trade as Max Recycle, claim that a ruling made back in 2011 by HMRC, which introduced VAT exemptions for UK councils, provided councils with an unfair commercial advantage over privately run waste company’s who offer the same service and that it was also anti-competitive.

No doubt, the verdict will be a source of relief for a number of local authorities, some of which have set up their own waste collection services over the past few years.

Mr Justice Warren made it perfectly clear in his ruling, that he believes councils do not have the power to offer trade waste collections as commercial ones, other than by going through a chosen company, in compliance with section 95(1), of the Local Government Act 2003.

He did add however, that local authorities do have provision to implement the service by the powers granted in section 45(1)(b), of the Environmental Protection Act 1990 and that councils are duty-bound to provide commercial waste collections, if an occupier of a premises requires it and for a fair price.

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