HMRC to appeal VAT decision

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HMRC expected to contest multimillion pound European Telecom VAT tribunal decision

HM Revenue and Customs (HMRC) is expected to contest a decision by the VAT and Duties Tribunal to make it repay £13 million in VAT and costs to former handset distributor European Telecom, owned by Israeli firm Emblaze Telecom and led by John Drinkwater (pictured).

European Telecom went into administration in May 2007 owing £8 million to creditors but owed £8.8 million in withheld VAT repayments from HMRC for suspected involvement in a VAT carousel fraud.

The disallowed VAT was on 33 purchases totalling £50.2 million from Unique Distribution, another defunct UK distributor that was formerly the official UK supplier for Nokia.

HMRC was ordered to repay the money within 56 days (issue 473, September 27), but is now understood to be appealing. HMRC declined to comment.

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