£1bn at stake: taxpayer wins compound interest on overpaid VAT
The High Court (Henderson J) handed down its decision on 28 March 2014 awarding mail-order and retail company Littlewoods Retail compound interest on sums of overpaid VAT that had originally been reimbursed to it by HMRC with simple interest. Littlewoods’ claim is estimated at in excess of £1bn, representing interest on repaid sums going back many decades. Littlewoods is by no means alone in this matter and thousands of similar claimants have had their claims stood behind this main action.
The judgment, described by Henderson J himself as ‘a long and twisted journey’, has culminated in a comprehensive defeat for HMRC, which it must be said used every conceivable defence to the claim.
It was many years ago that the House of Lords in Sempra Metals Ltd v Commissioners of Inland Revenue determined that compound interest was an adequate indemnity under EU law. That case involved mistaken repayment of advance corporation tax. So those who have justifiably put in claims for compound interest on overpaid VAT have no doubt been somewhat perplexed by the tortuous court processes (including a referral to the CJEU) that has eventually determined compound interest as payable on VAT…
Click on the link below to read the rest of the DLA Piper briefing.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from DLA Piper
News from The Lawyer
Briefings from DLA Piper
Health Alert — Julia Clare v Australian Community Pharmacy Authority; Dr Reid v Medical Council of NSW; and more
DLA Piper has released the 22 December 2014 issue of its Health Alert, which focuses on judgments, legislation and reports in the health sector.
The European Court of Justice (CJEU) has handed down a landmark judgment concerning the patentability of stem cells in Europe.
Analysis from The Lawyer
Regulators are ramping up the pressure in the aftermath of recession, leaving firms to compete for compliance and restructuring work
Shearman & Sterling is making its presence felt in the City, squaring up to magic circle firms and looking to muscle in on key relationships. Private equity house Bridgepoint is one outfit that has had its head turned by the US firm.