PETERSFIELD Town Council faces a bill of between £40,000 and £50,000 after it was revealed that it has not been paying VAT in the correct way for the past three years.

And at a meeting on Monday night it was decided that VAT will be imposed on all town council properties and services from April 1.

Chairman of the finances and general purposes committee, Dr Brian Keefe, addressed the council on Monday.

He said that, for several reasons, the correct rate of VAT had not been applied to a variety of services, leaving the town council with a huge debt to pay.

Former chairman of the committee, George Watkinson, had been aware of the situation for some time and had been making plans to deal with the financial crisis.

Dr Keefe paid tribute to Mr WatkinsonÕs work and told The Herald he was determined not to let the problem affect the level of council tax for people in Petersfield.

He said: ÒIt is my view that the council should not use other peopleÕs money easily.

ÒWe will have the funds to deal with this and it is my intention that we should pay this debt as soon as possible.

ÒThe town council has a budget meeting coming up and I will be working hard to make sure that this does not affect it.Ó

Financial experts had been bought in recently to unravel the financial problems.

Dr Keefe said the town council had a rough idea of what it would be charged but was waiting for a final figure from officers at HM Customs.

At Monday nightÕs meeting councillors agreed to support a series of recommendations.

Dr Keefe said an extraordinary meeting of the finances and general purposes committee, when the proposals were discussed, was Òvery helpfulÓ.

The first proposal is to deal with the finances of the Heath lake separately.

Dr Keefe said the Heath could be better managed by the council if it was treated as a charity. This would involve councillors meeting to discuss the finances of the townÕs lake as trustees.

Town clerk Barbara Macken was keen to point out that the proposal would not include separating the administration of the Heath.

Dr Keefe said: The Heath is a very big area of land and is very costly. There are some forms of revenue that come from the Heath like the boats, the kiosk, and from people who use the land for funfairs.

ÒBringing this into trustee status will make it much more favourable for the ratepayers of Petersfield.Ó

Councillors also agreed that VAT should be imposed on all the town councilÕs properties and services from April 1, 2001.

Dr Keefe said this would be a fair way for the town council to deal with the many organisations that it charges.

He said: ÒWe have decided to wait until next year so people can be warned. We will send a letter out to everyone concerned.

ÒI believe we have to treat everyone in the same way. It is not fair for some people to be charged VAT and not others. From April 1, 2001 everyone will be treated equally.Ó