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May 25, 2009
Why Small Businesses Could Be Due Compound Interest On VAT Refund?
Small businesses should be delighted at the news that the High Court has ruled that compound interest is payable in principle on overpaid VAT. In many cases this will mean that the interest receivable will far exceed the value of the overpaid VAT.
This decision, in the group litigation brought by motor dealers, clarifies that small businesses and taxpayers have six years from the date they discovered they had inccorrectly overpaid VAT to make a claim for a refund. at the High Court.
The Judge ruled that compound interest is appropriate restitution for loss of use of the funds rather than the remedy currently available under UK law.
However, this only applies where the overpayment of VAT arose because UK law or HM Revenue and Customs (HMRC) policy contravenes EU law. In all other circumstances, only basic interest is payable.
For more information on VAT, including how to check the validity of vat number visit the following resources:
Posted by David at May 25, 2009 8:49 AM
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