Compound interest
In addition to a repayment for overpaid VAT, you will also receive a repayment of statutory interest. However, this interest is calculated on a simple basis using a rate that is lower than the Bank of England base-rate. It is our view that this interest payment does not fully compensate dealers for the loss of the use of the VAT that it overpaid.
Following legal advice we have prepared a large number of claims for compound interest. These claims are being pursued in the High Court under the banner of a Group Litigation Order ('GLO') and parallel claims are also being pursued via the VAT Tribunal.
A claim for compound interest could be as high as four times the value of the statutory interest that will initially be paid by HMRC.
We urge you to consider a claim immediately as there are a number of potential time-limits that may be imposed on these claims.
For further information on the claim process and the likely cost of this action then please view our detailed briefing note.
