In Prudential Assurance Company Ltd v R & C Commrs [2018] BTC 31, the taxpayer sought (among other claims) restitution of an amount calculated as compound, and not simple, interest but the Supreme Court, in its judgment delivered in July 2018, rejected this claim. Mark Cawthron LLB CTA examines the judgment
In rejecting the Prudential claim, the Supreme Court departed from the House of Lords judgment in Sempra Metals Ltd v R & C Commrs [2007] BTC 509.
The Prudential judgment should perhaps not surprise, after last year’s Littlewoods Ltd v R & C Commrs [2017] BVC 54 case, also on compound interest. These two cases, and the prior R & C Commrs v The Investment Trust Companies [2017] BVC 16, are important because they represent a pretty fundamental review – or reassessment – by the Supreme Court of the concept of ‘unjust enrichment’ and of related rights to restitution.
They also prompt one to wonder more generally whether long-standing decisions of the Courts, taken as settled – and as providing well-established ‘principle’ or ‘practice’ to guide taxpayers (and the Tribunals) – may these days be more vulnerable to ‘reinterpretation’ by a pro-active Supreme Court.
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