Berkshire Golf Club and the economics of unjust enrichment

By the release of the judgment in Berkshire Golf Club, the First-tier Tribunal has given its first judgment on unjust enrichment since the 2003 judgment from the CJEU in Weber’s Wine World, in which it was made clear that establishing unjust enrichment is an economic exercise. This case amply demonstrates that unjust enrichment is a complex and challenging (and expensive) defence for HMRC to cite. However where HMRC has been prepared to incur the substantial economic analysis investment that citing and proving unjust enrichment requires, the taxpayer may face a similar outlay in rebutting HMRC’s assertions. So what does this mean for the future of this defence? In the writers’ opinion, the case amply illustrates that the advocate general in Commission v Italy was right. The economics of unjust enrichment are fraught with difficulty.