Unjust enrichment?

Refund of incorrectly paid VAT

The investment trust companies applied for refunds of VAT which they had paid on the supply of investment management services from investment managers.

The supplies had been incorrectly treated as taxable as later established by the Court of Justice of the EU in JP Morgan Fleming Claverhouse Investment Trust (Case C-363/05) [2008] STC 1180.

As a result the managers claimed a refund of the VAT. HMRC repaid this subject to the time limit rules in VATA 1984 s 80(4) and calculations to take into account the input tax deducted by the managers before paying the output tax to the Revenue. The managers passed the refunds to the trust companies.

The trust companies appealed because the repayment was less than the VAT they had wrongly paid to the managers.

The case progressed to the Supreme Court where HMRC appealed against a decision of the Court...