HMRC has just suffered a significant defeat in a landmark VAT case at the House of Lords. The case concerned retrospective capping measures which introduced a 3 year time limit for reclaiming overpaid VAT in 1997. The court agreed with the earlier findings of the Court of Appeal that such measures were illegal due to their retrospective nature and lack of transitional provisions.
The two respondents in the judgment Fleming (t/a Bodycraft) v HMRC and Cond Nast Publications Limited v HMRC had found that their six year reclaims were effectively time barred when HMRC introduced the three year limit.
Following its defeat at the Court of Appeal in 1996, HMRC brought out Business Brief 13/06, this details what claims may be made as follows:
A claim can be made where an amount:
- has been im...