Operators seeking 3G tax refund

The UK’s five third-generation (3G) mobile licence holders have begun legal proceedings against the government in a bid to claw back GBP3.9 billion in value added tax (VAT) they claim to have paid in the country’s September 2000 3G auction. Lawyers representing Vodafone, T-Mobile, Orange, O2 and Hutchison 3G are basing their case on claims that the government sold the concessions in a commercial capacity. This assertion was backed up by a high court ruling in 2001 which found the auction was conducted with the aim of ‘maximising revenues for the state’. The authorities have thus far refuted the claims, saying the government acted as a public body and therefore is not obliged to issue a VAT invoice for the licences.