Investment Trust Companies (in liq) v HM

Revenue and Customs

Investment Trust Companies v HMRC [2012] EWHC 458 (Ch) is
an English unjust enrichment law case, concerning to what extent
Investment Trust
enrichment of the defendant must be at the expense of the claimant. Companies v HMRC
Court High Court
Citation(s) [2012] EWHC 458 (Ch)
Contents Keywords

Facts Expense of the claimant

Judgment
See also
Notes
References
External links

Facts
The Investment Trust Companies (ITC), closed end investment trusts who got investment management
services from management companies, sued to recover overpaid VAT from the HMRC. The managers
usually got paid by fees plus VAT. It was thought 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 exempt 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 any earlier accounting periods because the Value Added Tax
Act 1994 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 [2008] 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 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
damages.

See also
English unjust enrichment law
Notes

References

External links

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This page was last edited on 1 January 2020, at 21:52 (UTC).

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