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| Olympic Games face huge tax bill | Olympic Games face huge tax bill |
| (7 minutes later) | |
| Organisers of the 2012 London Olympic Games have discovered they may be facing a huge additional tax bill. | Organisers of the 2012 London Olympic Games have discovered they may be facing a huge additional tax bill. |
| Tory Olympic spokesman Hugh Robertson said the government had assured him the £2.38bn cost of construction sites would not be subject to VAT. | |
| But the Treasury is demanding the tax, and has said European regulations state it cannot be seen to be supporting the organisers of the event. | |
| It is in discussions with the Olympic Delivery Authority over the matter. | It is in discussions with the Olympic Delivery Authority over the matter. |
| When the London bid was submitted to the International Olympic Committee in 2004 it included an estimate for building various sites in east London. | When the London bid was submitted to the International Olympic Committee in 2004 it included an estimate for building various sites in east London. |
| 'Specific undertakings' | |
| It estimated the cost at £2.38bn, but that did not include VAT on construction work or other costs. | It estimated the cost at £2.38bn, but that did not include VAT on construction work or other costs. |
| Mr Robertson said forcing the Olympic organisers to pay VAT at a rate of as much as 17.5% would be devastating. | Mr Robertson said forcing the Olympic organisers to pay VAT at a rate of as much as 17.5% would be devastating. |
| Mr Robertson said: "The issue of VAT on the Olympic sites was raised by the Conservative Party during the passage of the London Olympics and Para-Olympics Bill, and we received specific undertakings from the government that the Treasury would waive these costs. | Mr Robertson said: "The issue of VAT on the Olympic sites was raised by the Conservative Party during the passage of the London Olympics and Para-Olympics Bill, and we received specific undertakings from the government that the Treasury would waive these costs. |
| It would be wrong for there to be any further council tax increase London mayor, Ken Livingstone | |
| "It would be catastrophic if (Chancellor) Gordon Brown were to renege on that commitment now." | "It would be catastrophic if (Chancellor) Gordon Brown were to renege on that commitment now." |
| A Treasury spokesperson said: "We are in discussion with the DCMS (Department of Culture, Media and Sport) and the Olympic Delivery Authority (ODA) issues and we are confident we can find a way forward. | A Treasury spokesperson said: "We are in discussion with the DCMS (Department of Culture, Media and Sport) and the Olympic Delivery Authority (ODA) issues and we are confident we can find a way forward. |
| "But it would not be helpful to give a running commentary on those discussions." | "But it would not be helpful to give a running commentary on those discussions." |
| Mayor of London, Ken Livingstone said: "It would be wrong for there to be any further council tax increase, I will not be proposing or making one, so there will not be one." | |
| Officials at the Olympic Delivery Authority declined to comment. | Officials at the Olympic Delivery Authority declined to comment. |