The House of Lords will release it’s decision in the Conde Nast Publications
test case today, one of the most significant VAT cases for many years.
If the House of Lords finds in favour of the publisher, which was advised by
Deloitte, UK companies could be able to recoup at least £1bn in overpaid VAT.
The case concerns Conde Nast’s claim for underclaimed VAT on staff expenses
going back to 1973.
HMRC refused most of the claim on the basis the claim was outside the 3 year
limitation period for making claims for overpaid taxes, which Parliament
introduced into law with effect from 1 May 1997.
Conde Nast contested the case through the entire UK court system that the UK
legislation, which capped its claim, was defective and in breach of EU law
principles of effectiveness and legal certainty, as the new UK law did not
contain any transitional arrangements to allow taxpayers to bring claims which
the previous law would have allowed them to make.
This case potentially affects all businesses that might have valid claims for
under recovered VAT under the old law but were unable to claim back the overpaid
VAT because of the three year cap.
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