Unjustly enriched

The taxpayer companies contended that the UK rules on the taxation of dividends were a breach of article 63 of the Treaty on the Functioning of the EU.

The details of the case concerned the taxation of dividends from overseas companies received by UK-resident companies. Corporation tax was due on such dividends until 2009 when most became exempt as the result of a change in the law.

Mr Justice Henderson in the High Court referred to the European court of justice’s decision in Test Claimants in the FII Group Litigation v HMRC (No 2) [2013] STC 612.

He concluded that advance corporation tax offset against mainstream corporation tax was unlawful and should be repaid.

The Revenue was “enriched by the overpaid tax and in each case full restitution requires an award of compound interest as part of the principal sum which the claimant is entitled to recover...