Taxman's £81.5 million rebate for Virgin Media

11 April 2012

Broadband and pay-TV giant Virgin Media was today celebrating an £81.5 million VAT refund from HM Revenue & Customs.

The refund covers an eight-year period between 2003 and 2011 on an undisclosed part of the Virgin business.

It has also agreed to pay a lower-than-expected £23.6 million in VAT as a result of a separate settlement with HMRC, ending the threat of a possible court case.

Virgin had previously warned in its accounts that it faced a possible charge of up to £74.6 million after tax authorities "challenged our VAT treatment" on some revenues.

The media group did not set aside money for that claim because it said at the time "we do not deem them to be probable of resulting in a liability".

The annual report had warned that it could face court action in late 2011 or early 2012.

A Virgin spokesman said HMRC will drop the case as a result of today's agreement.

Virgin Media shares nudged up 7p to 1971p.