On July 3 the Supreme Court will hear an appeal brought by HMRC against Littlewoods, in the latest stage of its long-running dispute over interest payments on a tax refund dating back 30 years.
The FT reports that Littlewoods has already received a £204m refund from HMRC on VAT that was wrongly charged on commissions paid to its agents who distributed mail-order catalogues. It has also received £250m of simple interest on the VAT refund. However, the company contends it should have received £1.2bn of compound interest charged on the interest already earned.
Bill Dodwell of consultancy Deloitte said the case potentially had important consequences for claims by other companies:
“There are a lot of cases stacked behind this one.”Giles Salmond, a partner of Eversheds Sutherland said:
“If Littlewoods is successful, billions of pounds of interest will be payable to taxpayers in relation to various historic claims.”HMRC has estimated it would have to pay out as much as £55bn if it lost all the legal battles it is fighting with taxpayers.
However, HMRC has calculated it will only have to to pay out on a fraction of these cases. The provisions it has made for tax disputes total £5.9bn.
Tax does have to be taxing.
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What an incompetent bunch HMRC really are. Never mind, its 'only' tax payers money!!! Its for that stinking attitude that certain failing managers should be sacked. They have it far too easy on board the gravy train.
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