NEWS21 June 2013

Aimia wins Nectar VAT case

Legal UK

UK — Nectar card owner Aimia has won its decade-old battle with the taxman over VAT charges following a ruling in the UK Supreme Court.

For more than a decade, the Canadian owner of the loyalty card programme has been fighting Her Majesty’s Revenue & Customs (HMRC) through the courts over VAT charged on payments made to retailers in the UK where customers are able to redeem points.

Where a customer redeems points, Nectar pays the participating company and until the ruling Nectar had to pay VAT on that transaction which led to claims of double taxation.

Following the ruling, Aimia will be able to reclaim VAT on those fees paid to partner companies.

The ruling could be see Aimia’s profits boosted by up to £4m from 2014 and in a statement, the company said that there would also be a £27.2m one-time benefit to net earnings and £16.7m to adjusted EBITDA.

Aimia’s group chief executive Rupert Duchesne said: “This has been a long time coming and we are very pleased with the outcome of the UK Supreme Court’s ruling.”

The company said it believed the ruling was final although the HMRC said it was consider the full implications of the judgment and would issue full guidance “in due course”.