Primback Update

D.F.S. Furniture Company PLC
12 July 2004

For Immediate Release



12 July 2004





                       DFS Furniture Company PLC ('DFS')

                            Update on Primback Case



DFS announces that the House of Lords has refused HM Customs & Excise leave to
appeal against the Court of Appeal decision of 16 March 2004. The Court of
Appeal had previously found in favour of DFS in respect of VAT assessments
totalling £14.6 million. DFS will also be entitled to claim interest and costs.
The case relates to certain VAT assessments made by HM Customs & Excise in
respect of the period 1993 to 1996 associated with the Primback case.



The sum of £14.6 million, plus interest, will be treated as an exceptional item
and will be subject to corporation tax at the appropriate rate.



Other VAT disputes relating to the Primback case continue.




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