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The long-running Littlewoods case looks set to continue, with HMRC seeking leave to appeal the latest decision in favour of the catalogue-based retailer.
The company and several similar businesses overpaid a total of £204m in VAT on mail order sales commissions between 1973 and 2004, and later received a repayment with simple interest – which sparked litigation seeking compound interest.
The long-running Littlewoods case looks set to continue, with HMRC seeking leave to appeal the latest decision in favour of the catalogue-based retailer.
The company and several similar businesses overpaid a total of £204m in VAT on mail order sales commissions between 1973 and 2004, and later received a repayment with simple interest – which sparked litigation seeking compound interest.
Court of Appeal found against the Revenue last month, deciding that the claim succeeded in full.
The case had previously been heard by the Court of Justice of the European Union and the High Court. The latter reached its finding based on the claimants’ “exceptional” circumstances.
The Revenue considers the judgment to be at odds with the requirements of European law and how parliament intended VAT law to work.
The department plans to appeal to the Supreme Court, in the belief the Court of Appeal ruling did not deliver a clear method for calculating the level of interest that provides adequate indemnity to claimants.
HMRC say they will apply for any claims for compound interest already lodged with the High Court or county court to continue to be stayed pending the final determination of the Littlewoods litigation.
The taxman’s position in relation to tribunal appeals is unchanged: they should continue to be stood over until there has been a final determination as to the availability of compound interest in the UK. New requests for compound interest will continue to be refused.
