Retrospective provision

Effect of FA 2004 s 320 on late repayment claims

Jazztel was one of many companies that had paid the stamp duty reserve tax (SDRT) higher charge before the EU declared it unenforceable. They claimed restitution for the overpaid tax on the basis HMRC had been enriched at their expense. Jazztel was chosen as the test case.

To establish its claim Jazztel had to show it had mistakenly believed the SDRT to be lawful and this had caused it to make the payments. HMRC denied that the taxpayer had settled the tax by mistake.

The High Court decided that the taxpayer’s ‘corporate state of mind was that the liability to pay SDRT was a lawful one’ and this was the reason it made the payments.

HMRC argued that it had a limitation defence based on FA 2004 s 320 (Exclusion of extended limitation period in England Wales...