Tax & Accounting News

HMRC loses VAT repayment claims cases

23/01/2008

HMRC has lost two significant VAT repayment claims cases in the House of Lords.

The cases related to claims for the repayment of input tax for periods before 1 May 1997, which HMRC refused to repay due to the introduction of the three-year cap. The companies in question argued that the cap was not compatible with EU law because there was no reasonable transition period. The Lords agreed, so the three year limit no longer applies, and HMRC will have to repay the tax.

This will open the door to similar claims by other companies, although a new deadline will probably soon be set.

Please contact us if you believe you may have been prevented from reclaiming VAT by the three-year VAT cap, as any new claims should be submitted as soon as possible.