Unjust outcome

In 2004 HMRC repaid VAT to the taxpayer company together with interest calculated on a simple basis.

The company said that it should be paid compound interest and appealed to the VAT tribunal as HMRC said they had no jurisdiction regarding restitutionary claims for interest.

HMRC later made an application under regulation 6 of the VAT Tribunals Rules 1986 for the appeal to be struck out on the grounds it had been made out of time and the tribunal had no power to hear it.

HMRC also applied for a six-month stay of the substantive appeal on the ground that it raised similar issues to other existing cases.

Notice of stay of application was sent to both parties but HMRC claimed they did not receive it.

The tribunal heard both applications and dismissed HMRC’s application for the appeal to be struck out. HMRC appealed.

In the Chancery...