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‘Mammoth victory’ for Councils set pocket millions after HMRC tribunal victory

Craigavon Civic Centre

Armagh City, Banbridge and Craigavon Borough Council has welcomed a legal victory that could see it pocket a substantial VAT rebate in the millions of pounds.

The decision by the First-Tier Tribunal to agree with Mid Ulster District Council that VAT should not be applied to charges members of the public pay for access to council sport and leisure facilities could see councils here receive a share of rebates totalling £50 million.

The tribunal determined that VAT paid on these charges since 2006 was outside of the VAT regime and that the VAT should be repaid.

Speaking about the decision a spokesperson for Armagh City, Banbridge and Craigavon Borough Council welcomed the decision.

“The Council welcomes the decision by the First-Tier Tribunal in respect of a long standing VAT claim and notes that the Tribunal’s decision is still being considered by HMRC,” said a Council spokesperson.

“The Council is not in a position to make any further comment at this point in time.”

The decision comes at an interesting time for councils across Northern Ireland.

Council finances have been hit by the COVID-19 pandemic and with the rate setting process due to begin shortly, a substantial financial boost could prove timely.

Mid Ulster District Council’s rebate alone is estimated to be worth around £3 million.

The Chair of Mid Ulster District Council, Councillor Cathal Mallaghan said the ruling was a “mammoth victory” for all 11 councils.

“This is a mammoth victory from which each and every Council here, and their ratepayers, will benefit substantially,” said Cllr Mallaghan.

“Given the significant financial pressures which we all face as a result of the pandemic, the timing could not be any better.”

The Chair also praised the hard work of Mid Ulster District Council’s finance director JJ Tohill, without whom, he claimed, this victory would not have been possible.

“While our sector gains as a whole, this case would not even have been taken, let alone succeeded without Mid Ulster’s Finance Director, JJ Tohill.

“JJ’s expertise, hard work and dogged determination over a sustained period, together with a brilliant legal team, has brought us all to this landmark win.”

A spokesperson for HMRC said it was “considering the judgement carefully”.

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