HMRC battles Littlewoods over compound interest on VAT repayments
HMRC has provisionally won a High Court VAT battle against Littlewoods over interest on a £200m repayment.
The retailer argued that the amounts repaid by HMRC should be calculated using compound interest rather than simple interest. It’s estimated that the extra interest could total in excess of £2bn for UK taxpayers.
The Court has provisionally ruled strongly in favour of HMRC but has referred the case to the European Court of Justice (ECJ). There will be a further hearing of the High Court in July.