The Supreme Court has today refused to hear an appeal by HMRC in relation to a case involving compound interest.
In July, the Court of Appeal ruled in favour of a group of five motor dealers seeking compound interest from HMRC on VAT repayments. The Court of Appeal decided the taxpayers had indeed made their appeals to the Tax Tribunal in time and the Supreme Court’s decision today means the taxpayers have finally won on that point.
The Court of Appeal should now address the main question in the case, namely whether the motor dealers must be awarded compound interest on VAT repayments from HMRC under VAT legislation.
There are a number of cases which are testing the application of compound (as opposed to simple) interest to VAT repayments and it is estimated t...