Canadian loyalty management company Aimia, which runs the Nectar loyalty card scheme in the UK, has won a lengthy court battle over a £27.2m VAT payment dispute with HMRC following a UK Supreme Court ruling in its favour.

The case has been through every UK court and was referred to the European Court of Justice in 2010 before it was sent back to the UK Supreme Court, which has passed a judgment the company described as final, after more than a decade of litigation.

This follows secondary submissions to the Supreme Court; the final judgment Revenue and Customs v Aimia Coalition Loyalty UK Ltd [2013] UKSC 42 (20 June 2013)was issued yesterday.

Rupert Duchesne, Aimia Group chief executive said: 'This has been a long time coming and we are very pleased with the outcome of the UK Supreme Court's ruling.

The litigation was over VAT charged on payments made to retailers in the UK, where customers are able to redeem points. Under the Nectar programme, used by more than 19m people, shoppers collect points when they spend money with companies which are part of the scheme. They then use the points to get money off their bill when they have built up sufficient credit.

When a shopper redeems points at a participating company, Nectar pays that group. Until now, it has had to pay VAT on that transaction, leading to claims of double taxation. In future, Aimia will be able to reclaim VAT on those fees paid to partner companies.

As a result, Aimia says it will see a one-time benefit of $42.1m (£27.2m) to net earnings and $25.7m (£16.7m) to adjusted EBITDA. In future, it is likely to a £2m to £4m boost to profits from the change in VAT charging.

A spokesman for HMRC said: 'HMRC is carefully considering the full implications of the judgment, and we will issue further guidance in due course.'