Traders to launch test case on VAT Traders are hoping to bring claims against Customs for withholding VAT repayments and causing damages such as cashflow interruptions and consequent loss of profits fees incurred in seeking professional advice financing costs and costs for liquidations. The High Court issued a preliminary ruling that these claims should be grouped together under a group litigation order (GLO). London legal firm DLA Piper has been appointed by the High Court as lead solicitors to administer the GLO. Customs claims that a total of 157 traders have had VAT withheld. Michael Anderson an associate at DLA Piper said: "There are at least that many potential claimants out there. Whether they all have the appetite to bring damages claims is of course a different matter." DLA Piper is currently agreeing the terms of the GLO with Customs before seeking final approval. After that at least one claim will go forward as a test case with the other claimants sharing the costs of litigation. It is likely that there will be a cut-off date for traders to join the GLO. A Customs spokesman said: "HM Revenue & Customs did not act unreasonably and we will rigorously contest any claims for damages and/or compensation. "It is part of HMRC´s responsibilities in the care and management of tax to undertake legitimate verifications of VAT claims prior to payment. These claims total many millions in an area of significant fraud. We would be failing in our duties to taxpayers in general if we did not take adequate steps to ensure traders were entitled to this money before we repaid it."
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