The CEO of Freeserve has told news agency Reuters that his
company is preparing a case for judicial review of the UK tax
position which exempts its rival AOL from charging VAT to its UK
customers, giving the US company an annual tax saving in excess of
£30 million.
Under a new EU Directive, AOL will have to charge its UK
customers VAT at 17.5%. The Directive requires non-EU businesses to
register for VAT in the EU and charge VAT at the standard rate in
force in the member state where their customers reside. However,
the Directive is unlikely to be implemented in the UK before
mid-2003. Freeserve recently complained about the refusal of
Customs & Excise to make an announcement in relation to the
current VAT treatment of AOL.
John Pluthero, CEO of Freeserve, which is owned by Wanadoo of
France, told Reuters, “Frankly, this makes my blood boil that this
should go on this long.” AOL argues that it is complying with
Customs & Excise policy.
