The Circumlocution Office

KEY POINTS

• The difference between simple and compound interest.
• The Sempra case and the discretionary right to compound interest.
• Should a state benefit from monies wrongly withheld?
• Why has Major Perkins not received compound interest for maladministration?
• Would payment of compound interest create an expensive precedent?

Here’s a question: where is the consistency in compound interest being paid to some of the war veterans who had wrongly suffered tax deducted from their pensions the same being paid on advance corporation tax paid prematurely yet VAT entities only receiving ‘simple’ interest in similar cases and HMRC denying that an EU decision is applicable?

All of them have in one case or another received repayment of tax beyond what we generally consider the ‘normal’ time limits.

This article considers cases involving compound and simple...