UK News: Taxpayers to lose out on billions of VAT interest

Becky

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Accountancy Age said:
Taxpayers are unlikely to be able to seek billions of pounds in compound interest from the taxman from overpaid VAT, according to senior European opinion.

The advocate general in the European Court of Justice has decided that overpaid VAT by UK taxpayers, due after HMRC breached European law, would only require simple interest applied to it.

Taxpayers had argued that the overpaid tax, some of which dates back to 1973, should be subject to compound interest.

However, advocate general Trstenjak said that taxpayers would be unlikely to be able to claim compound interest when delivering opinion on the Littlewoods case.

The advocate general's opinion is usually followed by the judges in the European court
The use of simple interest calculations rather than compound interest could have a massive impact for businesses contesting historical liabilities.

The full article can be read on Accountancy Age.
 

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