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Weil Secures £1.2 Billion High Court Victory for Littlewoods Group of Companies

Weil has today secured a landmark victory for established London office client the Littlewoods group in its long-running dispute with HMRC concerning interest on overpaid VAT.

In the judgment handed down today, Mr Justice Henderson held that the catalogue and home shopping group's claims, worth in excess of £1.2 billion, "succeed in full." The judgment is one of the largest money judgments (if not the largest money judgment) ever handed down by the English courts, and is among the most significant tax-related decisions of the modern era.

The judge's principal finding is that EU law requires HMRC to pay Littlewoods an "adequate indemnity" for the loss suffered as a result of the overpaid VAT, which must compensate Littlewoods for the "loss of use value" of the money incorrectly held by the government for over 31 years. As a matter of English law, the judge determined that this compensatory payment "is properly reflected in an award of compound interest" of, in this case, approximately £1.2 billion (taking account of the simple interest already paid to Littlewoods).

The Weil team acting for Littlewoods was led in London by dispute resolution partner Jamie Maples, assisted by tax counsel Oliver Walker, dispute resolution associates Christopher Marks and Timothy Goldfarb and legal executive Christine Howard. Weil instructed Laurence Rabinowitz QC, Steven Elliott and Maximilian Schlote (all of One Essex Court).

Jamie Maples commented "The judgment represents a comprehensive victory for our clients. In addition to securing the repayment of any overpaid tax, taxpayers should now check whether this decision entitles them to compensation reflecting the use value of that money over time." Oliver Walker said "The decision confirms the right to compound interest on tax overpaid in breach of EU law where simple interest does not properly compensate the taxpayer. This is a ground-breaking development, and is likely to have positive implications for many taxpayers."


The claim arises from overpayments of VAT made by companies in the Littlewoods group between 1973 and 2004. The overpaid VAT was repaid by HMRC at various points between 2005 and 2008, together with simple interest. However, the simple interest equated to only a fraction of the actual benefit which the government derived from retaining the overpaid VAT over a 31 year period. Littlewoods therefore claimed compound interest from HMRC, reflecting the loss of the use of the money over that period.

Littlewoods issued these proceedings in 2007. The first phase of the High Court trial took place in April 2010. It was adjourned for questions to be referred to the Court of Justice of the European Union, which gave its judgment in July 2012. The High Court trial then resumed and concluded over three weeks in October and November 2013.

This news appeared in the following outlets (may require registration/subscription):

  • Law360: UK Judge Awards Retailer Littlewoods £1.2B Tax Claim (March 28, 2014)