The company sought repayment of excess advance corporation tax payments made under a mistake of law. The question was the extent of the effect of the ruling in Klienwort Benson, in particular whether it covered sums paid as taxation, and how the law of limitation was to be allowed for.
Held: Money paid under a mistake as to law was subject to restitution either where the demand had been unlawful even though it was a payment of tax, but such a claim was subject to limitation laws, or under section 33 of the 1970 Act where the demand was lawful. The Kleinwort Benson case could not be used to make such a claim.
Judges:
Buxton, Rix, Jonathan Parker LJJ
Citations:
[2005] EWCA Civ 78, Times 15-Feb-2005
Links:
Statutes:
Taxes Management Act 1970 33, Limitation Act 1980
Jurisdiction:
England and Wales
Citing:
Cited – Woolwich Equitable Building Society v Inland Revenue Commissioners (2) HL 20-Jul-1992
The society had set out to assert that regulations were unlawful in creating a double taxation. It paid money on account of the tax demanded. It won and recovered the sums paid, but the revenue refused to pay any interest accrued on the sums paid. . .
Appeal from – Deutsche Morgan Grenfell Group Plc v The Commissioners of Inland Revenue, HM Attorney General ChD 18-Jul-2003
The taxpayer sought to bring an action for restitution by the revenue of sums paid under a mistake of law. Under the Metallgesellschaft decision, rights of election for recovery of overpaid tax applied only between UK resident companies.
Held: . .
Cited – Metallgesellschaft Ltd and Others v Inland Revenue Commissioners and Another Hoechst Ag and Another v Same ECJ 8-Mar-2001
The British law which meant that non-resident parent companies of British based businesses were not able to recover interest on payments of advance corporation tax, was discriminatory against other European based companies. Accordingly the law was . .
Cited – Kleinwort Benson Ltd v Lincoln City Council etc HL 29-Jul-1998
Right of Recovery of Money Paid under Mistake
Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable when made. Subsequently, a decision of the House of Lords, (Hazell v. Hammersmith and Fulham) established that such swap . .
Cited – British Steel Plc v Her Majesty’s Commissioners for Customs and Excise CA 20-Dec-1996
The claimant company paid excise duty on hydrocarbon oil used in its blast furnaces, whilst consistently contending that it was entitled to relief under section 9(1) of that Act on the ground that the oil was not used as fuel. The Commissioners . .
Cited – Marcic v Thames Water Utilities Limited HL 4-Dec-2003
The claimant’s house was regularly flooded by waters including also foul sewage from the respondent’s neighbouring premises. He sought damages and an injunction. The defendants sought to restrict the claimant to his statutory rights.
Held: The . .
Cited – Eagerpath Ltd v Edwards (HM Inspector of Taxes) CA 14-Dec-2000
Where the special commissioner had determined that the dispute had been concluded by agreement, the taxpayer was precluded from appealing that decision claiming an ‘error or mistke’ That issue was not one relating to the computation of profits in . .
Cited – Mallusk Cold Storage Ltd v Department of Finance and Personnel QBNI 29-Aug-2003
The first plaintiffs constructed premises which were rated as from 1 April 1987. Having taken advice, they appealed the rating assessment on the ground that the premises were industrial premises, and had a nil rateable value. The appeal was . .
Cited – D B Ramsden and Co Ltd v Nurdin and Peacock Plc and Another ChD 14-Sep-1998
The tenant overpaid rent, including a payment in May 1997 on advice that the payment would be recoverable following litigation establishing that it was an overpayment. The court later held that the payments in question were indeed overpayments. The . .
Cited by:
Cited – Autologic Holdings Plc and others v Commissioners of Inland Revenue HL 28-Jul-2005
Taxpayer companies challenged the way that the revenue restricted claims for group Corporation Tax relief for subsidiary companies in Europe. The issue was awaiting a decision of the European Court. The Revenue said that the claims now being made by . .
Appeal from – Deutsche Morgan Grenfell Group Plc v Inland Revenue and Another HL 25-Oct-2006
The tax payer had overpaid Advance Corporation Tax under an error of law. It sought repayment. The revenue contended that the claim was time barred.
Held: The claim was in restitution, and the limitation period began to run from the date when . .
Lists of cited by and citing cases may be incomplete.
Taxes Management, Equity, Limitation
Updated: 29 June 2022; Ref: scu.222200