Manchester United VAT case could set new precedent

Premiership side Manchester United is part of a group which has launched a
legal case against the taxman challenging compound interest claims from VAT
payments which could open the “floodgates” for other businesses.

Man Utd is trying to recover more than £300,000 in backdated compound
interest from HMRC according to accountancy firm Hurst.

The club has already received £61,000 in VAT and “simple interest” said the

Rachel Murphy, head of tax at Hurst, the case was the tip of the iceberg. ”
Thousands of businesses could have a case for claiming compounded interest on
their VAT refunds,” she said.

“There’s a lot at stake for businesses large and small and I’m confident
we’ll see more claims as businesses do their best to recoup interest. Businesses
must make sure their accountant reviews their entire VAT position to check what
is owed.”

The Premiership side is one of a group of businesses to launch the petition
at the High Court.

The Manchester United claim relates to money it believes is owed from being
wrongfully charged VAT on its £18m stock market floatation in 1991. The club was
taken over by the Glazers family in 2005, the

This is not the first time HMRC has been taken to court over compound

Last month retailer Littlewoods lost a High Court bid against HMRC to repay
an estimated £1bn in compound interest on £200m of VAT the company was owed.

The court found just simple interest should be paid.

Further reading:

United demands tax back

wins VAT battle for compound interest

wins battle with Littlewoods over compound interest repayments

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