18th Century Toll Bridge VAT Rebate Row

Posted: 26th October 2012

A judge is being asked to delve into the minds of 18th Century Parliamentarians in order to decide whether the owners of a historic toll bridge should qualify for a £700,000 VAT rebate. Whitchurch Bridge has crossed the Thames on the border between Berkshire and Oxfordshire since 1792 and has its very own act of Parliament to mark its unique status.

The bridge, originally built by 10 local dignitaries using their own funds, is now in its third incarnation and the latest cast iron Grade II-listed structure is decaying. The Company of Proprietors of Whitchurch Bridge, which manages the landmark under the terms of the Whitchurch Bridge Act 1792, wants to replace it with a new one but argues that it should be permitted to recover VAT on the construction costs.

However, Her Majesty's Treasury disagrees and Mr Justice Burnett has now been tasked with resolving the dispute.

The company’s lawyers argue that the Parliament of 1792 had clearly not wanted the bridge to be a drain on public funds and had intended it to be self-funding through tolls collected. The statute, which was re-enacted in 1988, states that the bridge should not be subject to any ‘rate, tax or duty whatsoever’ and it is argued that this means that VAT paid to contractors involved in the construction of the new bridge should be recoverable from the Treasury.

However, Treasury lawyers argue that if the company is held to be exempt from all forms of taxation that will include not just VAT but national insurance contributions and PAYE, vehicle excise duty and other levies. The Treasury says that its policy is that the relevant VAT refund scheme is in principle confined to bodies which are directly funded by state grants or whose costs are met by centrally-funded bodies.

The judge has now reserved his decision on the case.