Restitutionary claim for overpaid VAT fails

In 2009 BT claimed VAT bad debt relief concerning bad debts from 1978 to 1998. HMRC refused and the matter progressed through various court hearings.

The Court of Appeal rejected the claim on the basis principally that the legislation which introduced a new form of bad debt relief and was in place when BT made its claims specifically prevented claims being made under the old regime.

On the unjust enrichment issue the court held that for the periods before and after the new bad debt relief being implemented HMRC had not been unjustly enriched. The judge said there had been no transfer of value rather BT had ‘simply failed to make a claim for VAT bad debt relief whether by refund or by set off against VAT it owed within the requisite period. Neither a failure to bring a claim for a refund nor a...