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The Tribunal’s decision in the lead compound interest case of John Wilkins (Motor Engineers) Limited and Others has just been released. Similar to the High Court in the VIC GLO, the Tribunal determined that, whilst taxpayers have a right in principle to the payment of compound interest, the particular claims were time-barred. The Tribunal further found that the VAT legislation cannot be interpreted to allow payment of compound interest, and the appropriate remedy is a civil law claim for restitution in the High Court: like that brought by the parties to the GLO. It is understood that an appeal has been lodged against the High Court’s judgment, and it is expected that the recent decision of the Tribunal will also be appealed. While the Tribunal and High Court cases are brought by different claimants and on different legal bases, it is possible that the cases may either be joined or heard simultaneously. Businesses wishing to claim compound interest need to act quickly, as illustrated both in the recent case of Grattan plc, and the John Wilkins case. Businesses who have, to date, solely relied on an appeal to the Tribunal, will need to consider whether a High Court claim is now required.
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