VAT: Compound Interest Cases in the UK Courts
Presently there are a number of VAT cases (Littlewoods Retail Ltd being one of them) progressing through the UK Courts in connection with businesses who have either reclaimed over paid Output Tax or under claimed Input Tax submitted a Voluntary Disclosure to HMRC. HMRC has repaid these Voluntary Disclosures under s80, VATA 1994 and ‘simple’ interest under s78, VATA 1994. There is a Direct Tax case (Sempra Metals) where ‘compound’ interest was found to be the correct recompense for the business as a result of a breach of Community (EU) law. If your business has received a repayment from HMRC and interest (simple interest) you should consider whether you have a claim for compound rather than simple interest. This repayment may relate to a Voluntary Disclosure submitted in connection with a time period since the inception of VAT in the UK in 1973.
If you wish further advice speak to your Wylie & Bisset contact on 0141 566 7000 or email
info@wyliebisset.com
