Tax
Manchester United VAT case to open floodgates |
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| Tax | |
| Written by Gary Howes | |
| Wednesday, 16 June 2010 | |
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Tax experts say the Manchester United case highlights the issue for thousands of businesses across the UK.
Manchester United's landmark VAT case could open the floodgates for thousands of claims from businesses across the UK, say tax experts. HMRC has already refunded the club £61,000 in VAT and ‘simple interest,’ but Man U claims it is still owed funds in ‘compounded interest’. If VAT repayments are paid with compound interest, it is estimated that the extra interest could total more than £2bn for UK taxpayers. Tax experts say the Manchester United case highlights the issue for thousands of businesses across the UK. Rachel Murphy, head of tax at accountancy firm Hurst, said: “This case is the tip of the iceberg and thousands of businesses could have a case for claiming compounded interest on their VAT refunds “There’s a lot at stake for businesses large and small and I’m confident we’ll see more claims as businesses do their best to recoup interest. Businesses must make sure their accountant reviews their entire VAT position to check what is owed.” “Although there have been a number of cases on the subject of compound interest which HMRC has won, another judge could look at the point again and come to a different conclusion. “The outcome of the Manchester United case could be significant for small businesses who are struggling to come out of recession.” Manchester United is among a group of taxpayers which are petitioning the High Court for a refund. The claimants say compound rather than simple interest should be paid on VAT refunds. Manchester United’s claim relates to money the club says it is owed after being charged VAT on its stock market flotation in 1991. United was listed on the London Stock Exchange for 14 years before the Glazers took control in summer 2005.
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