Manchester United football club is the latest organisation battling HMRC over compound interest on VAT.
The club has begun legal action in a bid to recover more than £300,000 in backdated payments relating to VAT payments on its stock market flotation in 1991. HMRC has already refunded £61,000 to the club in VAT and ‘simple interest’, but bosses are claiming compounded interest is still owed.
“This case is the tip of the iceberg and thousands of businesses could have a case for claiming compounded interest on their VAT refunds,” warned Rachel Murphy, head of tax at accountancy firm Hurst.
The Manchester United case follows a recent High Court victory by retailer Littlewoods, which successfully pursued £200m in backdated repayments from HMRC...