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John Wilkins (Motor Engineers) Ltd v HMRC

In John Wilkins (Motor Engineers) Ltd v HMRC (and related appeals) (CA – 14 April) five companies had accounted for VAT on sales of ‘demonstrator cars’ on which input tax had been ‘blocked’ and which should have been treated as exempt (applying the ECJ decision in EC Commission v Italian Republic) and on payments from manufacturers which should have been treated as discounts on the sale price of the cars (applying the ECJ decision in Elida Gibbs Ltd).

HMRC made the repayments together with simple interest under VATA 1994 s 78. The companies appealed to the Upper Tribunal contending that the effect of the HL decision in CIR v Sempra Metals Ltd (2007 STC 1559) was they were entitled to compound interest.

The Upper Tribunal dismissed the appeals on the grounds that they were out of time and that there...

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