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The amount received comprises the claim of £1.3m and interest of £1.6m.
The refund came from a claim made as a result of the Marks & Spencer European Court test case in 2002, which relates to VAT overpaid on demonstrator vehicle bonuses in the period 1973-1997.
HMRC appeal
The appeal is scheduled to be heard in the House of Lords in the last quarter of 2007.
Should the HMRC appeal be successful, Caffyns will be required to repay the £3m as well as accumulated interest.
Caffyns’ claim had previously not been paid pending clarification on a point of law which has still not yet been resolved.
Cases pending
“This is the best method of recognising the payment as if the appeal from HMRC is successful the dealers will be required to fully repay the refund plus interest accrued within 14 days.”