CA-2024-001898 - [2025] EWCA Civ 1392

“85 Interest in respect of unlawful ACT

This section applies where—

on any date before 12 December 2012, a person started proceedings against the Commissioners in the High Court or the Court of Session,

the proceedings include a claim arising out of a relevant payment, and

the claim has not been settled, discontinued or finally determined.

“Relevant payment” means a payment of unlawful ACT that—

was made by the person on or after 1 January 1996 or in the period of 6 years ending immediately before the date the proceedings were started, and

was set off or repaid (wholly or in part) before the proceedings were started.

The person is entitled to an order requiring the Commissioners to pay to the person—

an amount (“the principal amount”) equal to the amount of interest that would have accrued if simple interest had accrued on the relevant payment at the appropriate rate for the period beginning with the date the payment was made and ending with—

the date as regards which the unlawful ACT was set off, or

the date the unlawful ACT was repaid, and

simple interest at the appropriate rate on the principal amount for the period beginning with the day after the date mentioned in paragraph (a)(i) or (ii) and ending with the date the principal amount is paid.

“The appropriate rate” is, in relation to any day, the rate specified in the following table in respect of that day

…

In this section—

“the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs (or, in relation to any time before the commencement of section 5 of the Commissioners for Revenue and Customs Act 2005, the Commissioners of Inland Revenue);

“set off or repaid”: references to a payment of unlawful ACT being set off or repaid are—

to it being set against a liability to corporation tax of any person, or

to it being repaid by the Commissioners;

“settled” means settled by agreement;

“unlawful ACT” means advance corporation tax that was unlawfully levied.”

The table that follows s.85(4) specifies a rate that, from 27 January 2009, has been 0.5% per annum. It is materially lower than the rate applicable under s.35A, but s.85 was held in FII SC3 to provide an adequate remedy.

Following another judgment of Richards J in Evonik UK Holdings Limited & Ors v Commissioners of Inland Revenue [2024] EWHC 3239 (Ch), it is now established that s.85 FA 2019 governs the entirety of Evonik’s FID claim.