Source: All England Reporter
Publisher Citation: [2015] All ER (D) 225 (May)
Neutral Citation: [2015] EWCA Civ 515
Court: Court of Appeal, Civil Division
Judge:

Lady Justice Arden DBE, Lord Justice Patten and Lord Justice Floyd

Representation Laurence Rabinowitz QC, Steven Elliott, Michael Jones and Maximilian Schlote (instructed by Weil Gotshal & Manges) for the claimants.
  Jonathan Swift QC, Andrew Macnab, Peter Mantle and Imran Afzal (instructed by the General Counsel and Solicitor to the Revenue and Customs Commissioners) for the Revenue.
Judgment Dates: 21 May 2015

Catchwords

European Union - Value added tax - Refund of tax - Overpayment - Entitlement of taxpayers to compound interest on overpaid tax - Claimants succeeding in claims to recover in restitution time value of overpaid VAT - Defendant Revenue and Customs Commissioners appealing - Whether claimants' restitution claims being excluded by statute - Whether exclusion being contrary to European Union law - Whether statute capable of construction conforming with EU law or provisions falling to be disapplied - Whether benefit to government from overpayments of tax correctly measured by objective use or actual use value - Whether compound interest should continue to run after date of repayment of principal amounts of overpaid VAT until date of judgment.

The Case

European Union Value added tax. The claimants had been successful in their proceedings to recover in restitution the time value of the overpaid VAT. The defendant Revenue and Customs Commissioners appealed against the judges' findings on liability and quantum. The Court of Appeal, Civil Division, in dismissing the appeal, held that the claimants' restitutionary claims were excluded by and of the Value Added Tax Act 1994, which accordingly fell to be disapplied. Further, as the Revenue should not be treated as an involuntary recipient of overpayments, the benefit to the government from the overpayment of tax was correctly measured by the objective use value.

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