HM Revenue and Customs Brief 05/09
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Issued 18 February 2009
Marks & Spencer Plc -v- CRC  UKHL 8 - Judgment
of the House of Lords - VAT claims made before 26 May 2005 no longer
subject to unjust enrichment
Where a business has accounted for too much VAT and makes a
claim to recover it, HM Revenue & Customs (HMRC) can refuse to
pay that claim if they can show that payment would unjustly enrich the
claimant. However, until the law was changed in 2005, this unjust
enrichment defence could only be used against a specific category of
claimants. This meant that it was possible that a claim by one business
could be refused whilst a similar claim from another business could not.
Marks & Spencer fell within the former category and
challenged the discriminatory nature of the legislation.
The House of Lords judgment
In light of the House of Lords judgment, issued on 4 February
2009, the unjust enrichment defence will no longer be used against any
claim made before 26 May 2005 (the date on which the law was amended to
remove the discrimination referred to above).
Claims made before 26 May 2005
Claims made before 26 May 2005 that were refused by HMRC on
the grounds of unjust enrichment and have still not been settled will
now be paid, subject to verification. Claims where the unjust
enrichment defence was not challenged or was upheld, in the courts, may
be resubmitted for consideration, subject to the relevant time limits.
Claims made on or after 26 May 2005
As a result of the change in the law made in the Finance (No.
2) Act 2005, which applies the unjust enrichment defence to all
categories of claimants, the judgment of the House of Lords does not
affect any claim made on or after 26 May 2005.
About the Author
© Crown Copyright 2009.
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Article Published/Sorted/Amended on Scopulus 2009-03-17 12:35:58 in Tax Articles