Overpaid Tax: Claiming for Compound Interest

Following a long-awaited decision by the High Court, taxpayers can now, in certain circumstances, claim compound interest on tax overpaid by mistake (Littlewoods Retail Limited and others v The Commissioners for Her Majesty’s Revenue and Customs [2014] EWHC 868 (Ch)). The court also held that, where compound interest is payable in connection with overpaid VAT, sections 78 and 80 of the Value Added Tax Act 1994 (VATA), which provide a statutory framework for the repayment of VAT with simple interest, must be disapplied. Read more.