cearta.ie

the Irish for rights

Interesting times for restitution claims

May you live in interesting times.

This is – apocryphally – an ancient Chinese curse. Whatever its provenance, the times are certainly interesting for those who seek restitution of taxes invalidly paid contrary to EU law. In Test Claimants in the FII Group Litigation v HM Revenue & Customs [2008] EWHC 2893 (Ch) (27 November 2008) Henderson J dealt with a series of issues arising in such claims, and in Test Claimants in the VIC Group Litigation; FJ Chalke Ltd & Anor v Revenue & Customs [2009] EWHC 952 (Ch) (08 May 2009) he held that EU law required compound interest to be paid on such claims. This is in contrast to the position at national law, where the courts have held that similar claims to restitution of overpaid taxes (such as was pleaded in the more recent Bloomsbury International Ltd v Sea Fish Industry Authority [2009] EWHC 1721 (QB) (24 July 2009)) only attract simple interest (see my piece “Interesting Times. Overpaid Taxes, Restitution and Compound Interest” (2005) 27 DULJ (ns) 343-363). After Chalke, the Times reported that this could pave the pay for claims amounting to more than £1 billion, and in my previous post I noted that the Financial Times later reported that the Revenue had put aside five times this amount to deal with these and similar claims.

Now comes the bizarre news that the UK’s new Upper Tribunal for tax matters has held where VAT was paid in accordance with domestic law provisions later found to be incompatible with EU law, the Revenue must refund the tax with simple interest only. In Wilkins v The Revenue Commissioners [2009] UKUT 175 (TCC) (pdf), the Tribunal held that ss 78 and 85A of the Value Added Tax Act 1994 (also here) and other provisions to which they refer, which allow for interest on such claims, on their natural construction provided only for simple interest. According to the Times, the consequence will be that affected taxpayers will only receive simple interest from the Revenue and will have to bring a further claim in the High Court for that to be topped up to compound rates. It is an interesting development, but it almost certain to be appealed, though whether the appeal will be successful may very well depend on the outcome of the appeal in the FII litigation, which is due to open next week in the Court of Appeal. In the meantime, judgment is awaited in Ireland in the case brought by GE Capital Woodchester against the Revenue claiming it has overpaid some €19 million due to the State’s alleged failure properly to implement an EU directive related to the VAT treatment of hire purchase transactions.

One Response to “Interesting times for restitution claims”

  1. […] The Independent and the Financial Times both quote the £5bn figure; however, more apocalyptically, the Telegraph reports that it could cost $20bn; the Daily Mail (gleefully) reported it as another headache for the Chancellor; whilst the Wall Street Journal was more restrained, simply referring to a significant tax loss for UK authorities. The Times observed that this is the latest in a series of legal defeats for HMRC, giving rise to many refund claims which must be paid with compound rather than simple interest. The pending appeals in the FII and Chalke cases should sort out the principles on which Revenue & Customs will have to make restitution plus interest. […]

Leave a Reply

 

Welcome

Me in a hatHi there! Thanks for dropping by. I'm Eoin O'Dell, and this is my blog: Cearta.ie - the Irish for rights.

"Cearta" really is the Irish word for rights, so the title provides a good sense of the scope of this blog.

In general, I write here about private law, free speech, and cyber law; and, in particular, I write about Irish law and education policy.

Academic links
Academia.edu
ORCID

Subscribe

  • RSS Feed
  • RSS Feed
  • Subscribe via Email
  • Twitter
  • LinkedIn

Archives by month

Categories by topic

My recent tweets

Blogroll (or, really, a non-blogroll)

What I'd like for here is a simple widget that takes the list of feeds from my existing RSS reader and displays it here as a blogroll. Nothing fancy. I'd love a recommendation, if you have one.

I had built a blogroll here on my Google Reader RSS subscriptions. Google Reader produced a line of html for each RSS subscription category, each of which I pasted here. So I had a list of my subscriptions as my blogroll, organised by category, which updated whenever I edited Google Reader. Easy peasy. However, with the sad and unnecessary demise of that product, so also went this blogroll. Please take a moment to mourn Google Reader. If there's an RSS reader which provides a line of html for the list of subscriptions, or for each RSS subscription category as Google Reader did, I'd happily use that. So, as I've already begged, I'd love a recommendation, if you have one.

Meanwhile, please bear with me until I find a new RSS+Blogroll solution

Thanks,

Eoin.

Licence

Creative Commons License

This blog is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. I am happy for you to reuse and adapt my content, provided that you attribute it to me, and do not use it commercially. Thanks. Eoin

Credit where it’s due

The image in the banner above is a detail from a photograph of the front of Trinity College Dublin night taken by Melanie May.

Others whose technical advice and help have proven invaluable in keeping this show on the road include Dermot Frost, Karlin Lillington, Daithí Mac Síthigh, and Antoin Ó Lachtnáin.

Thanks to Blacknight for hosting.