Dorsey London Tax Update

This update was originally published in November 2007.

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Upcoming and Anticipated Dates

Upcoming Seminars and Presentations

Discounts to these IIR and Lexis Nexis conferences are available for Dorsey clients (please contact us for the "VIP" number).

Paul Farmer Joins Dorsey

We are very pleased to announce that Paul Farmer has now joined the London office of Dorsey from the European Commission where he was head of Analysis and Co-ordination of Tax Policies. Before working with the Commission Paul worked as a lawyer at the eCJ for many years and subsequently became a leading Barrister well known to all our clients for his important contributions to our cases in that capacity. Paul brings a wealth of experience in EU corporation tax matters, as well as an extensive VAT background, including his representation of the tax payers in the successful Kretztechnik case. In 2006 he was named UK Tax Lawyer of the Year by Lexis Nexis.

Unhappily, Liesl Fichardt leaves the team at the end of this month to take up a position at the Berwin Leighton Paisner law firm. Liesl's contribution to these cases has been enormous since joining Dorsey in 2005. We wish Liesl all the best in her career.

Compound Interest: Developments

We reported in July that the House of Lords' decision in Sempra Metals opened the way to claim compound interest calculated at HMRC's rate of borrowing upon the repayment of taxes paid by mistake (typically in circumstances where the tax was discovered after payment to be contrary to community law). This raised the residual question among others - what interest rate applies? Previously in cases for restitution of tax paid HMRC had agreed an interest rate of bank base plus 1%pa but only on a simple interest basis. The Lords' decision suggested that a lesser interest rate would now apply questioning whether the reduction in interest rate and the improvement from simple to compound interest might perhaps cancel each other out.

When valuing compound interest claims, HMRC have ("without admission") now applied a rate of bank base plus 0.75%pa as the interest rate in some cases. Although the relevant rests to applying (e.g. whether the compounding is daily, monthly, quarterly etc) remains undecided, the rate suggested seems an encouraging development.

Dorsey have also represented claimants seeking compound interest following successful VAT repayment claims.

Recent Hearings

In Marks and Spencer v Comm. of Customs and...