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HMRC confirms it will pay statutory interest only.
HMRC has confirmed it will pay statutory interest on refunds of overpaid VAT. This follows the Supreme Court’s decision in Littlewoods Retail Ltd and others on 1 November 2017.
Littlewoods and others had claimed repayment of overpaid VAT on commissions on mail order sales. This was repaid with simple interest but the taxpayers argued they were entitled to compound interest.
The court ruled that the statutory interest paid to the claimants was adequate. The litigation is now final. HMRC said it would not pay compound interest on overpaid VAT or for any compensatory amounts.
For more information see Revenue and Customs Brief 5/2017. HMRC has withdrawn Revenue and Customs Briefs 9/2015 and 20/2014 which were issued previously on the litigation.
