Simple Interest is an Adequate Remedy for Overpaid VAT

09 Nov 2017 | by Tarlochan Lall

Littlewoods Limited & others v Commissioners for Her Majesty’s Revenue and Customs [2017] UKSC 70

The Supreme Court has decisively and unanimously concluded that s78 Value Added Tax Act 1994 (“VATA 1994”) provides complete and adequate compensation for being kept out of the money by providing for simple interest on overpaid VAT.   The words “if and to the extent that they would not be entitled to do so apart from this section”  in s78(1) did not preserve common law rights to compound interest alongside s78, otherwise s78 “would effectively become a dead letter”.  Those words only preserve other statutory rights to interest.  Further, s78 does not violate EU law by denying taxpayers “an adequate indemnity”.

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The comments made in this case note are wholly personal and do not reflect the views of any other members of Monckton Chambers, its tenants or clients.