VAT focus: Compound interest on VAT overpayments

Speed Read: In FJ Chalke v Barnes v HMRC [2009] STC 2027 Henderson J ruled that HMRC cannot rely on the exclusivity of VATA 1994 to defeat common law restitutionary claims for compound interest in respect of overpayments made in breach of directly effective EU law rights. Although the matter is now, in effect, queued up to go to Luxembourg, there are indications in two recent Court of Appeal judgments that the learned judge may have misread the key ECJ jurisprudence on the point. This article considers whether the existence of a broad right to compound interest is now doubtful.