Weekly VAT Update – 7 November 2017
Litttlewoods’ claim for restitution that reflected compound interest rates
The Supreme Court has now made its decision on this long-running case. There were two key issues:
The first was whether Littlewoods’ common law claims are excluded by sections 78 and 80 as a matter of English law without reference to EU law. The previous courts had found this to be the case.
The second was that, if the claims were excluded, whether it was contrary to EU law. The previous courts had found in favour of Littlewoods on this point.
On the first point, the Supreme Court found that Parliament could not have intended that section 78 could be capable of circumvention by common law. On the second point, the Supreme Court said that the Court of Justice of the European Union has given member states the discretion to provide reasonable redress. Consequently, there was no requirement for the value of the redress to make good in full the taxpayer’s loss.
Littlewoods’ claim for £1.25 billion was therefore rejected.
Bahrain rejects the introduction of VAT
A key parliamentary committee in Bahrain has vetoed plans to introduce VAT. Bahrain was one of the six Gulf Cooperation Council states due to introduce VAT from next year. Now, only UAE and Saudi Arabia have confirmed that VAT will be introduced from 1 January 2018. The Bahraini House will have to vote on the parliamentary committee’s decision for the decision to be finalised.