VAT Refunds Begin - Arguments for Further Compound Interest in Progress
24/07/2009
After our successful submission of all 500 demo claims to HMRC before the 31st March deadline, HM Revenue and Customs have begun processing the claims with many of our clients having already received substantial VAT refunds. We are in daily contact with HMRC and are aware that they have an outstanding number of claims to process. Should you be concerned you have not had a response please rest assured that we have procedures in place to ensure they are in receipt of your claim and it will be processed as soon as it has been allocated to an Officer.
As you may already be aware the VAT repayments generally attract statutory interest. However, we have brought several lead cases to the Upper Tribunal to argue that HMRC should pay compound interest which can attract as much as four times the value of statutory interest. This is a landmark case and the first to be heard in the Upper Tribunal, which took place in June 2009. The claim for compound interest is also being argued through a Group Litigation Order which was first heard in the High Court February 2009. The result was favorable as the judge found compound interest was due, subject to time constraints. However this is likely to be appealed by both parties.
We are awaiting a decision from the Upper Tribunal which is anticipated to be some time in August 2009. We are then hopeful that the 2 cases will merge and will be heard together in the Court of Appeal early 2010.
If you would like more information regarding Compound Interest please contact Rob McCann.
