Littlewoods VAT battle rages on

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The European Court of Justice has referred a long-running battle between Littlewoods and HMRC over VAT interest repayments back to the UK’s High Court.

The owners, Sir David Barclay and Sir Frederick Barclay, are suing HMRC for failing to add compound interest when it refunded the retail group excess VAT payments going back more than 30 years.

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About Robert Lovell

Business and finance journalist


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    20th Jul 2012 16:42

    Compounding the Problem!

    The Treasury's main concern is not the legal argument, but the potential cost to the public purse. If Littlewoods are successful, many other claims will be submitted. The sums will be into billions.

    The same has to be said for the take-away food case, due to be heard at the Upper Tier Tribunal next week. The cost of the Treasury will also be measured in billions if the taxpayer is successful.

    Thanks (0)
    to bboy201
    22nd Jul 2012 23:33

    On the other hand, they could charge compound interest on late payment of tax, based on the same principle, and that would make them a lot more money than they stand to lose.

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    to bboy201
    23rd Jul 2012 12:47

    We're all in this ...

    "The cost of the Treasury will also be measured in billions if the taxpayer is successful."

    Didn't you mean to say "... if the hard-working taxpayer is successful."

    Thanks (0)
    23rd Jul 2012 10:23


    yep you can't help feeling that with the boot on the other foot and an effectively 'interest free' loan by hmrc to all the numerous companies who fail to pay corp tax/paye etc on time then i am not sure they will be so eager to argue that compound interest should be charged.


    Thanks (0)
    23rd Jul 2012 13:00


    I think the government should send them to bed without any jam and bread tonight

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    23rd Jul 2012 15:01

    need the funds

    littlewood clearly need some funds...

    sooner littlewoods goes under the better imo

    Thanks (1)
    By Vinoo
    23rd Jul 2012 20:43


    Littlewood received £268.2m interest on overpaid VAT. My understandinf is that HMRC would not pay any "interest" on overpaid VAT but it would be "Ex-Gratia" payment and so the compund element is not applicable.

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