Shop Direct Group v HMRC

In Shop Direct Group v HMRC (A3/2013/1532 – 11 March 2014) Shop Direct Group (SDG) challenged the assessment to corporation tax of a VAT repayment of nearly £125m together with interest of nearly £175m. SDG had been assessed under ICTA 1988 s 103 in relation to post-cessation receipts of trades and in relation to interest payments arising from a loan relationship under ICTA 1988 s 18. The court unanimously dismissed the appeal.

In relation to the post-cessation receipts each of the companies which had made the relevant overpayments of VAT had transferred their trades. The first issue was therefore whether the charge to corporation tax imposed by s 103 applied only to a post-cessation receipt by the original trader. Briggs LJ considered that the charge applied to any recipient on the basis that the provision was widely drafted and that it could not have been intended...