British American Tobacco (BATs), the principal test claimant in a court action against Her Majesty's Revenue and Customs (HMRC), is busy trying to decode the Supreme Court's judgement in the case but it looks like the group will be able to put in claims for tax rebates dating back to 1973.
Admitting that the 190-page judgement is complex, BATs said it will be enlisting the aid of its learned friends from the legal community to decide on its future course of action in its spat with HMRC.
There are 24 other parties enrolled in the group litigation against the Commissions for HMRC, but the main issue of relevance to BATs is the lawfulness of retrospective legislation introduced by section 107 (s107) of the Finance Act of 2007 (FA '07).
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The claimants in the group litigation (GLO) contend that they were discriminated against in breach of European Union law by the imposition of UK corporation tax charges, mostly in the form of advance corporation tax (ACT), upon the distribution of foreign sourced income.
The European Court and the UK High Court both ruled largely in favour of the claimants who had argued that the actions of HMRC were in contravention of European Union law, but then the UK Court of Appeal overturned the High Court's judgement, after which the Supreme Court was called in.
The panel of seven judges reviewing the case has unanimously held that s107 of FA '07 is in breach of European Law, and the claimants' right to petition for tax rebates (on the basis that the same income has effectively been taxed twice, once in the source state and then again when distributed to shareholders) has been restored.
"The effect of the judgement is to enable British American Tobacco and other claimants who issued their claims at about the same time to pursue claims for the recovery of unlawfully imposed UK corporation tax back, in most cases, to 1973," the statement from BATs says.
Although the European Court of Justice (ECJ) has ruled largely in favour of the tax-payers in those claims, the value of the claims is subject to a second reference to the ECJ.
The Advocate General's opinion in that reference is due on June 28th 2012. It is not known when the judgement of the court will follow. Once the ECJ judgement is delivered the matter will then revert to the UK courts.
Shares in BATs were down 31.5p at 3,018p in mid-morning trade.
JH
-
Google shares bounce on Gemini 2.0 launchGoogle has launched the latest version of its Gemini AI platform, and markets have responded positively. Is it time to buy Google shares?
-
Millions of pension savers could get targeted support under new proposalsThe proposals are part of the FCA’s attempt to tackle the advice gap, after 75% of savers admitted they don’t have a clear plan for their pension
