ARTICLE · 09 FEBRUARY 2012

VAT Focus - February 2012

Smith & Williamson

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The Advocate General (AG) has recently given his opinion in the Littlewoods Retail case at the Court of Justice of the European Union (CJEU).

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Smith & Williamson

Compound Interest Update

The Advocate General (AG) has recently given his opinion in the Littlewoods Retail case at the Court of Justice of the European Union (CJEU). The AG has indicated there is no basis under European law for compound interest reimbursement but did suggest that when national courts consider how their laws governing this should be interpreted, they should be no more or less favourable than in the case of refunds of other taxes (such as UK direct taxes). There may still be some scope to suggest that compound interest can apply in the UK if any other tax refunds can qualify for compound interest. Many taxpayers had argued that repayments for overpaid VAT, some of which date back to the beginning of the VAT system in 1973, should be subject to compound interest until the date of repayment by HMRC.

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