Supreme Court excludes investment trusts’ claims

Nick Skerrett and Gary Barnett’s article for Tax Journal discusses the decision of the Supreme Court to restrict the right of a consumer to recover overpaid VAT directly from HMRC.

This article was first published in the 28 April 2017 edition of Tax Journal, who have agreed to it being made available on Simmons & Simmons elexica.

The tension between EU law, the rights individuals derive therefrom and domestic tax regimes has been a recurring theme of tax litigation in the last 15 years. In particular, the limitation period for claims to recover overpaid output VAT provided by VATA 1994 s€80(4) has endured a prolonged assault by claimants pleading a range of positions, from offence to accrued legal rights in the absence of transitional periods to fundamental attacks on the validity of the statutory mechanism. Some have yielded results, while others have faltered. However, the latest decision of the Supreme Court in this battleground has come down firmly on the side of HMRC and the exhaustive nature of the domestic statutory repayment scheme for overpaid VAT.

Nick Skerrett and Gary Barnett’s lead article for Tax Journal reviews this latest decision that held that a consumer does not generally have a right to recover VAT which it has overpaid to its supplier directly from HMRC and cannot, therefore, sidestep the four year limitation period in VATA 1994 s 80(4).

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