01 Nov 2017
1 November 2017
The billionaire Barclay brothers have lost a decades-long battle with HMRC after the Supreme Court ruled that the taxman does not owe them £1.25 billion.
David and Frederick Barclay had been pursuing the claim after Littlewoods, the retailer they own through Shop Direct, overpaid VAT to HMRC between 1973 and 2004.
The company had already received a £205 million refund from HMRC, together with “simple interest” of £268 million, according to court filings.
But Littlewoods has been seeking “additional interest” calculated on a compound basis amounting to £1.25 billion on the grounds of the “common law of restitution, either as restitution for a mistake of law, or as restitution of tax unlawfully demanded”.
However, the Supreme Court unanimously dismissed the claim.
The case is significant for HMRC as, had it lost, it would have faced the prospect of hefty bills for other companies with similar grievances.
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