Customs fights tax dodge

A ROW has broken out between accountants and Customs and Excise over multi-million pound tax saving schemes designed to duck payment of VAT on company cars by leasing them from Germany and importing them to the UK, writes Peter Rodgers.

Customs said earlier this week it would block such schemes, being promoted by tax advisers.

But Nigel Cockburn, a partner in Price Waterhouse, defied Customs to find a way to stop the schemes, and refused to change his advice to clients.

'This is not tax avoidance but cross-border shopping,' he said. 'If I can lease a car more cheaply in Germany I am perfectly entitled to do that. This is tantamount to stopping British travellers buying cheap French beer on their way home from holiday.'

Mr Cockburn said he believed Customs was trying to warn off British companies but did not have any practical way of stopping them.

Customs and Excise, in an announcement on Wednesday, said VAT avoidance schemes could damage UK car manufacturers . It said it would work with other European Union countries to block the schemes.