Boake Allen Ltd and others v HM Revenue and Customs: CA 31 Jan 2006

The claimant companies had paid corporation tax under rules which had later been found to be discriminatory. They now sought repayment by virtue of double taxation agreements with the countries in which the parent companies were based.
Held: The double agreements required the taxation provisions should not treat worse ‘other similar enterprises of that first-mentioned state’ in the UK. The claimant had submitted that ‘other similar enterprises’ had to refer to the UK subsidiaries of UK parent companies. The Revenue contended that it was the group which was being referred to. That submission was not accepted. To limit the availability of group income elections to subsidiaries of UK companies would be a discriminatory breach.
However section 788 did not operate to incoporate the double taxation agreements into UK law, and therefore there was no remedy available to the taxpayers.
The question how restitutionary relief should be assessed was not settled by La Pintada, as the claim was not for an entitlement to interest, as creditors, on a debt or on damages by way of compensation for loss of the use of the money that was unjustly demanded and retained by the defendant.
The role of pleadings has not been abolished by the CPR. Mummery LJ said: ‘While it is good sense not to be pernickety about pleadings, the basic requirement that material facts should be pleaded is there for a good reason – so that the other side can respond to the pleaded case by way of admission or denial of facts, thereby defining the issues for decision for the benefit of the parties and the court. Proper pleading of the material facts is essential for the orderly progress of the case and for its sound determination. The definition of the issues has an impact on such important matters as disclosure of relevant documents and the relevant oral evidence to be adduced at trial. In my view, the fact that the nature of the grievance may be obvious to the respondent or that the respondent can ask for further information to be supplied by the claimant are not normally valid excuses for a claimant’s failure to formulate and serve a properly pleaded case setting out the material facts in support of the cause of action. If the pleading has to be amended, it is reasonable that the party, who has not complied with well known pleading requirements, should suffer the consequences with regard to such matters as limitation.’


Lord Justice Lloyd Lord Justice Mummery Lord Justice Sedley


[2006] EWCA Civ 25, Times 10-Feb-2006, [2006] STC 606, [2006] BTC 266, 8 ITL Rep 819, [2006] STI 32, [2006] Eu LR 755




Income and Corporation Taxes Act 1988 788(3)


England and Wales


CitedMetallgesellschaft 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 . .
CitedNEC Semi-Conductors Limited and Other Test Claimants v The Commissioners of Inland Revenue ChD 24-Nov-2003
UK companies were subsidiaries of companies resident abroad, and complained that they were unable to make group income elections.
Held: The prohibition infringed non-discrimination provisions of double taxation agreements – non-discrimination . .
CitedPresident of India v La Pintada Compagnia Navigacia SA (‘La Pintada’) HL 1985
The house decided against altering the rule in Page -v- Newman. ‘The common law does not award general damages for delay in payment of a debt beyond the date when it is contractually due’ The power given to the court under s 35A is discretionary. It . .

Cited by:

CitedRhone-Poulenc Rorer International Holdings Inc and Another v Yeda Research and Development Co Ltd ChD 16-Feb-2006
The patent application had been presented to the European Patent Office and granted only after 13 years. The claimant now appealed refusal to allow amendment of its claim to allow a claim in its sole name. The defendant argued that it was out of . .
Appeal fromBoake Allen Ltd and others v Revenue and Customs HL 23-May-2007
The revenue appealed against a decision that provisions which did not allow the defendants, as companies with foreign parents, the right to make group income elections which would have allowed them to pay on their profits to their parent companies . .
CitedSempra Metals Ltd v Inland Revenue Commissioners and Another HL 18-Jul-2007
The parties agreed that damages were payable in an action for restitution, but the sum depended upon to a calculation of interest. They disputed whether such interest should be calculated on a simple or compound basis. The company sought compound . .
CitedTest Claimants In The Franked Investment Income Group Litigation v Inland Revenue SC 23-May-2012
The European Court had found the UK to have unlawfully treated differently payment of franked dividends between subsidiaries of UK companies according to whether all the UK subsidiaries were themselves UK based, thus prejudicing European . .
CitedBenedetti v Sawiris and Others SC 17-Jul-2013
The claimant appealed against reduction of the sum awarded on his claim for a quantum meruit after helping to facilitate a very substantial business deal for the defendants.
Held: The correct approach to the amount to be paid by way of a . .
Lists of cited by and citing cases may be incomplete.

Corporation Tax, Litigation Practice, Damages

Updated: 05 July 2022; Ref: scu.238206