01 June 1999

MILLIONS OF POUNDS in additional VAT charges could hit sales promoters following a judgement by the European Court of Justice last month. The Court's landmark ruling follows the referral by a British VAT Tribunal of a case brought by HM Customs & Excise against Kuwait Petroleum's long-running Q8 Sails gift-collection promo, which ran from 1991 to 1996. Q8's argument - that customers had already paid VAT on their gifts as part of the cost of the petrol they bought to obtain the vouchers - was rejected by the Court which ruled that the vouchers could not be considered as part of the cost of the petrol, noting that the price of the petrol remained the same whether or not consumers accepted the vouchers. Q8, smarting from the decision, said: 'This ruling will mean many schemes may have to be discontinued.'