UT-2024-000123 - [2025] UKUT 00360 (TCC)

Mr Beal argued that the FTT erred in failing to give a Marleasing compliant interpretation to Schedule 3, paragraph 4 TTFO and/or s. 85A VATA. Even if the FTT lacks jurisdiction to award additional interest as a matter of domestic law, it was nevertheless required as a matter of EU law to read the relevant provisions in such a way as to grant it that power in order to protect the Company’s accrued rights to an “adequate indemnity” in the form of interest under EU law. In finding that statutory interest would always be sufficient, the FTT failed to give effect to the Company’s accrued right. The FTT did not properly analyse the case through the lens of the principles of equivalence and effectiveness.

The accrued right is a right to interest under EU law in respect of ongoing disputes about liability which start before 1 April 2009 (Emblaze (FTT and UT)). National law must provide an “adequate indemnity” for wrongfully being kept out of money and the FTT erred in its interpretation that Littlewoods CJEU precluded any argument that statutory interest did not provide an adequate indemnity. The finding by the Supreme Court in Littlewoods Limited that some (Company’s emphasis) interest is prescribed by domestic law does not exempt the national judicial authorities from their task of determining whether there has been an adequate indemnity in this case.

The FTT’s interpretation of paragraph 4 TTFO and/or s.85A VATA 1994 breaches the principles of equivalence and effectiveness by applying different regimes for enforcing rights to interest recovery under EU law in an ongoing dispute involving linked decisions pre and post April 2009 without objective justification and makes the enforcement of taxpayers’ rights excessively difficult by closing off consideration of whether there was an adequate indemnity post April 2009.