HMRC WINS COMPOUND INTEREST VAT RULING

摘要

The Upper Tribunal, one of the new tribunals set up under recent tax appeals reforms, has ruled that HM Revenue & Customs will not be obliged to pay compound interest on its VAT repayment to taxpayers.rnThe ruling will be open to appeal.rnAlthough the tribunal acknowledged that taxpayers were entitled to compound interest because of EU law, it ruled that the UK's VAT statute could not be accounted for as part of it.rnInstead, taxpayers will have to recover compound interest from HMRC by making a separate claim.rnCurrent claims for compound interest are estimated to be more than £1 bn.rnTony McClenaghan, a senior indirect tax partner at Deloitte, who has been acting for one of the lead cases in the tribunal, said: 'It results in an odd and unsatisfactory position - a taxpayer can receive simple interest under UK statute, but then has to litigate separately under a different regime to increase the amount to compound interest.'