TOUR operators could be in line for a multi-million pound windfall if First Choice wins its ground-breaking legal case against the Government.
The case, which is currently before a VATtribunal, claims that First Choice has wrongly been charged VAT on the brochured price of the holiday by Customs and Excise.
First Choice insist it should only have been charged on the actual selling price.
The action is being viewed as a test case by Thomson, Airtours and Thomas Cook who will all submit claims for millions of pounds if First Choice win. Accountants Deloitte and Touche, which is acting on behalf of the Crawley operator, said a decision is expected soon.
In a complex legal wrangle, Deloitte and Touche insist that First Choice and the rest of the operators have the support of European law.
David Bennett, head of Deloitte and Touche’s Indirect Taxes Travel Team, said:”We have been campaigning for an end to this dispute for 18 months and have consistently maintained that operators are paying too much VAT.
“A number of operators have submitted claims for overpaid VAT and we remain confident of a successful conclusion in favour of the operators. “We believe that European law supports the restitution of overpaid VAT to tour operators.”
A First Choice spokeswoman said: “We are acting on behalf of the industry. We believe it is wrong to charge VAT for a price which the customer did not pay.”
ABTA head of financial services Mike Monk said the decision could have far-reaching implications across the industry.
“I would think we are talking millions of pounds,” he said.