Toll tax: Bad news for British motorists

Motorists using major road bridges and tunnel crossings in Britain are set to face hefty increases in charges after a European ruling yesterday.

The government has fought against the levying of a 17.5% VAT charge being imposed by the European commission, but the European court of justice's advocate general has now said no country should be exempt from charging a tax on tolls.

Siegbert Alber, one of the court's eight advocates-general, said Britain is in breach of a 1977 directive requiring member states to charge the 17.5% tax.

A final ruling will be made this summer but it is unlikely motorists using the likes of the Skye bridge and the Dartford tunnel, will escape the charges.

Legal experts said last night that in 80% of cases a final decision follows the court advocates opinion.

The revelation sparked anger from motoring groups. Paul Watters, head of road and transport policy at the AA, said: "This is a further imposition on motorists who pay enough tax as it is."

A department of transport spokesman said: "These bridges and tunnels provide a public service and the UK government felt VAT should not be levied on the tolls."

Tory shadow transport secretary Bernard Jenkin said: "The government have been shirking on this issue. The court's judgment was inevitable."

The court also said Britain owes millions for late payment of the tax as well as the costs of the long-running case, brought by the European commission.

Member states are bound by treaty to pay a proportion of their VAT revenue to the EU's central budget.

France is also expected to be badly hitby the ruling.

The court of justice is the final arbiter in disagreements arising from EU treaties or legislation.

• Rail fares will be allowed to rise by as much as 5% under plans being drawn up to share out new rail franchises, the shadow Strategic Rail Authority confirmed yesterday.