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Wednesday, 08 November 2006 |
Gordon Brown downplays 2012 Olympics VAT bill
The British government is "committed to making the 2012 Olympics work" even though the organisers of the event face an unexpected VAT bill, Chancellor Gordon Brown has said.
EU rules mean VAT is due on the £2.4bn building costs as well because the Treasury cannot be seen to support the organisers. The Treasury is in talks with the Olympic Delivery Authority over the bill.
However, Mr Brown maintained there was "not an issue about the overall bill" for tax payers as "it is money transferred from the Exchequer or to the Exchequer," and added that costs, such as the increased need for policing the Olympics following last year's terrorist attacks on London, had gone up.
The 2012 Olympics would "also have a legacy that will regenerate that part of London and be of benefit to the whole United Kingdom," Gordon Brown said.
When the London bid was first submitted to the International Olympic Committee in 2004, it had included an estimate for building various sites in east London, but had presumed VAT would not have to be paid on top.
Gordon Brown explained: "When we did the original application, there was one form of company organisation that might not have required VAT.
"Now that we have looked at the thing in detail, there may be another form of company organisation for the Olympic deal."
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Last Updated ( Friday, 10 November 2006 )
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