Investment Trust Companies v Revenue And Customs [2015] EWCA Civ 82 (12 February 2015)

Investment Trust Companies v Revenue And Customs [2015] EWCA Civ 82 (12 February 2015)

The Court held that HMRC were only enriched to the extent of the net VAT received after deduction of input tax, not the full amount paid by the investment trusts. Any domestic law restitutionary claim for overpaid VAT by the trusts is excluded by s.80(7) VATA 1994. Under EU law, while a right to recovery exists, the statutory scheme and limitation periods are not to be disapplied except to the extent required by EU law. The claimants' remedy is limited to the net amount and subject to statutory time limits.

Citation
[2015] EWCA Civ 82
Parties
Claimant/appellant/respondent: Investment Trust Companies (in Liquidation); Defendant/respondent/appellant: The Commissioners for Her Majesty's Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
12 February 2015
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court (chancery Division)
Outcome
Appeal allowed in part; restitution limited to net VAT received by HMRC; statutory bar under s.80(7) applies; EU law does not require broader remedy.
Legal Topics
Value Added Tax (vat), Unjust Enrichment, Restitution for Mistaken Payment, Direct Effect of EU Law, Limitation Periods, Implementation of EU Directives
Tax Law Restitution European Union Law Value Added Tax (vat) Unjust Enrichment Restitution for Mistaken Payment Direct Effect of EU Law Limitation Periods +1 more

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Parties

Investment Trust Companies (in Liquidation)

Claimant/appellant/respondent

The Commissioners for Her Majesty's Revenue and Customs

Defendant/respondent/appellant

Procedural Posture

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

Legal Issues

  1. 1 Whether investment trusts have a restitutionary claim against HMRC for overpaid VAT under domestic law
  2. 2 Whether HMRC were enriched by the full amount of VAT paid or only the net amount after input tax deduction
  3. 3 Whether any domestic law claim is excluded by statute (s.80 VATA 1994)

Ratio Decidendi

The Court held that HMRC were only enriched to the extent of the net VAT received after deduction of input tax, not the full amount paid by the investment trusts. Any domestic law restitutionary claim for overpaid VAT by the trusts is excluded by s.80(7) VATA 1994. Under EU law, while a right to recovery exists, the statutory scheme and limitation periods are not to be disapplied except to the extent required by EU law. The claimants' remedy is limited to the net amount and subject to statutory time limits.

Court Disposition

Appeal allowed in part; restitution limited to net VAT received by HMRC; statutory bar under s.80(7) applies; EU law does not require broader remedy.

Orders

  • Claims for restitution by investment trusts against HMRC for the dead period are limited to the net VAT received by HMRC after input tax deduction.
  • No restitution for input tax retained by managers; any such claim lies against the managers, not HMRC.