Interest boost to VAT reclaims
RSPCA and Totel Ltd challenge government over VAT repayments
The government could be forced to pay out tens of millions of pounds to
taxpayers reclaiming disputed VAT repayments, following a landmark challenge by
the RSPCA and Totel Ltd.
The decision could particularly affect those whose repayments have been held
up following carousel fraud chain concerns.
Following the decision taxpayers who are owed VAT repayments and have gone
through a tribunal will be entitled to an interest rate at least 2% higher than
Both claimants were challenging HM Revenue & Customs’ stance that the
rate of interest paid on VAT repayments won after a tribunal should be the same
as when VAT is overpaid due to an HMRC error.
The High Court ruled that the rate after a tribunal should be at least 1%
higher than the base rate rather than 1% below, the administrative error rate.
Claimants linked to the Bond House action, the test case on disputed VAT
reclaims associated with carousel fraud chains, could claim back tens of
millions extra in interest as a result.