London 2012 Facing Tax Bill Over Construction

The construction work for the London 2012 Olympics could be subject to a
substantial VAT bill despite the financial estimates laid out in the bid
document not incorporating such tax payments.

According to Shadow Sport Minister Hugh Robertson, the UK government had
placed assurances that the £2.38bn cost of the construction for the Games would
not be subject to normal taxes which could be as much as 17.5%.

However, it has now emerged that the Treasury is demanding that tax on the
work is paid as European regulations dictate that it cannot be seen to be giving
special favour to certain projects.

Robertson stated that any addition of the VAT charge to the construction
budget would be ‘catastrophic’.

The Treasury is currently in discussions with the Olympic Delivery Authority
regarding a solution to the issue.