HBOS and Lloyds Banking Group v HMRC

In HBOS and Lloyds Banking Group v HMRC [2023] UKUT 13 (TCC) (13 January 2023) the Upper Tribunal (UT) held the appellants were entitled to interest from HMRC from the time that they would have made repayment claims had UK legislation been compliant with EU law as opposed to the dates their claims were actually made. The dispute was in the context of bad debt refund legislation that had previously been held to be incompatible with EU law.

Until 1997 the UK’s bad debt relief provisions contained a condition that for bad debt relief to be claimed on a supply of goods title in the goods must have passed. Between 1989 and 1997 the appellants made supplies of cars under hire purchase with retention of title where a customer defaulted on the hire charge. Consequently as the law stood they were unable to claim bad debt relief.

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