Overpaid tax—interest and damages
Produced in partnership with Etienne Wong of Old Square Tax Chambers
Overpaid tax—interest and damages

The following Tax practice note produced in partnership with Etienne Wong of Old Square Tax Chambers provides comprehensive and up to date legal information covering:

  • Overpaid tax—interest and damages
  • Interest on overpaid tax—the statutory regimes
  • Interest on overpaid tax—EU law
  • The Littlewoods case
  • Interest on overpaid tax—restitution
  • Corporation tax on restitution interest
  • Damages
  • Conditions under which there is a right to damages
  • Enforcement and quantum
  • Behaviour of the claimant
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for Tax?

FORTHCOMING CHANGE: Finance Bill 2021 will extend the statutory regime applying to repayment interest for direct taxes (in Finance Act 2009) to VAT, with effect from 1 April 2022. For more information, see News Analysis: Spring Budget 2021—Tax analysis.

This Practice Note is about:

  1. the right to interest on repayments of overpaid tax, whether under a statutory regime, EU law, or the common law (and specifically the law of restitution)

  2. the corporation tax charge on restitution interest, and

  3. EU law on whether overpaid tax may give rise to a right to damages

For information on the impact of Brexit on the matters discussed in this Practice Note as they apply in the UK, see the Brexit subtopic and in particular Practice Notes:

  1. The status of EU law in the UK after Brexit

  2. Introduction to retained EU law

  3. Brexit—introduction to the Withdrawal Agreement

Interest on

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