Littlewoods Ltd & Ors v HM Revenue and Customs [2015] EWCA Civ 515 (21 May 2015)

Littlewoods Ltd & Ors v HM Revenue and Customs [2015] EWCA Civ 515 (21 May 2015)

Sections 78 and 80 of VATA 1994 provide an exclusive statutory scheme for the repayment of overpaid VAT and the payment of interest, thereby excluding common law restitutionary claims for both principal and interest. The statutory scheme does not violate the EU law principle of effectiveness, as the simple interest paid under section 78 constitutes an adequate indemnity for the loss occasioned by the undue payment of VAT. The exclusion of restitutionary claims is therefore valid under both English and EU law.

Citation
[2015] EWCA Civ 515
Parties
Respondents/claimants: Littlewoods Limited and others; Appellants/defendants: The Commissioners for Her Majesty's Revenue and Customs (HMRC)
Jurisdiction
England and Wales
Judgment Date
21 May 2015
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court (chancery Division)
Outcome
Appeal by HMRC allowed; cross-appeal by Littlewoods dismissed.
Legal Topics
VAT Overpayment, Restitutionary Claims, Interest on Overpaid Tax, Statutory Exclusion of Common Law Remedies, EU Law Effectiveness Principle
Tax Law Restitution European Union Law VAT Overpayment Restitutionary Claims Interest on Overpaid Tax Statutory Exclusion of Common Law Remedies EU Law Effectiveness Principle

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Parties

Littlewoods Limited and others

Respondents/claimants

The Commissioners for Her Majesty's Revenue and Customs (HMRC)

Appellants/defendants

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court (chancery Division)

Legal Issues

  1. 1 Whether Littlewoods' restitution claims for overpaid VAT are excluded by sections 78 and 80 of VATA 1994 as a matter of English law
  2. 2 Whether such exclusion is contrary to EU law, specifically the principle of effectiveness
  3. 3 If exclusion is contrary to EU law, whether VATA 1994 can be construed to conform with EU law or must be disapplied

Ratio Decidendi

Sections 78 and 80 of VATA 1994 provide an exclusive statutory scheme for the repayment of overpaid VAT and the payment of interest, thereby excluding common law restitutionary claims for both principal and interest. The statutory scheme does not violate the EU law principle of effectiveness, as the simple interest paid under section 78 constitutes an adequate indemnity for the loss occasioned by the undue payment of VAT. The exclusion of restitutionary claims is therefore valid under both English and EU law.

Court Disposition

Appeal by HMRC allowed; cross-appeal by Littlewoods dismissed.

Orders

  • Littlewoods' restitution claims for compound interest are excluded by sections 78 and 80 VATA 1994 as a matter of English law.
  • The exclusion is not contrary to EU law; the statutory scheme provides an adequate indemnity.