''Investment Trust Companies v HMRC''
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* Tyrrell 012, a Formula One racing car
* The dialing code for Pretoria
Pretoria ( ; ) is the Capital of South Africa, administrative capital of South Africa, serving as the seat of the Executive (government), executive br ...
EWHC 458 (Ch) is an
English unjust enrichment law
The English law of unjust enrichment is part of the English law of obligations, along with the law of contract, tort, and trusts. The law of unjust enrichment deals with circumstances in which one person is required to make restitution of a bene ...
case, concerning to what extent enrichment of the defendant must be at the expense of the claimant.
Facts
The Investment Trust Companies (ITC), closed-end investment trusts that got investment management services from management companies, sued to recover overpaid
VAT
A value-added tax (VAT or goods and services tax (GST), general consumption tax (GCT)) is a consumption tax that is levied on the value added at each stage of a product's production and distribution. VAT is similar to, and is often compared wi ...
from the HMRC. The managers usually got paid by fees plus VAT. It was thought that there was no exemption possible, and VAT was charged at a standard rate. But then, the ECJ said in 2007, the services should have been exempted from VAT since 1 January 1990. The litigation had begun in 2004, and at that point, the managers claimed VAT refunds from 2001 to 2004. The claims were not made for earlier accounting periods because the
Value Added Tax Act 1994
The Value Added Tax Act 1994 (c. 23) is a UK tax law, concerning taxation of goods and services that fall within the scope of Value Added Tax (VAT). It came into force on 1 September 1994. The Value Added Tax Act 1983 was repealed and replaced by ...
section 80(4) installed a three year limitation period. HMRC repaid net amounts (because s 80(2A) required a set off from deductions of input tax already made for supplying services).
After ''
Fleming (t/a Bodycraft) v Customs and Excise Commissioners''
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In Ian Fleming's James Bond novels and the derived films, the 00 Section of MI6 is considered the secret service's elite. A 00 (pronounced "Double O") is a field agent who ho ...
UKHL 2, more refund claims were allowed going back to 4 December 1996. ITC claimed they had a remedy for restitution, that this claim was not excluded by the VATA 1994 section 80(7), and that EU law gave an effective right to reimbursement.
Judgment
Henderson J held that the HMRC was enriched by the full VAT amount at the expense of the ITCs. The unjust factor was the mistake of law that the VAT was due, and there was a causal link between the mistake, the payments and the Commissioners’ enrichment. But the claims were all barred by VATA 1994 section 80(7), whose purpose was a strict time limit. As end users of management services, ITC could have rights under EU law, following ''Danfoss'' and ''Reemtsma''. There should be a direct remedy, but subject to limitation defences. These were ''San Giorgio'' claims, and there was no need to confine the claimant to ''
Francovich v Italy
''Francovich v Italy'' (1991) C-6/90 was a decision of the European Court of Justice which established that European Union Member States could be liable to pay compensation to individuals who suffered a loss by reason of the Member State's fai ...
'' damages.
See also
*
English unjust enrichment law
The English law of unjust enrichment is part of the English law of obligations, along with the law of contract, tort, and trusts. The law of unjust enrichment deals with circumstances in which one person is required to make restitution of a bene ...
Notes
{{reflist, 2
References
*
English unjust enrichment case law
High Court of Justice cases
2012 in United Kingdom case law