Compound interest

Phase two of the litigation against HM Revenue & Customs in regard to payments of compound interest for official error involved an appeal to the upper tribunal as to whether s78, VAT Act 1994 should be interpreted as providing for compound interest in order to conform with European law, despite it providing, ostensibly, for simple interest at prescribed rates. This is essentially an alternative to taxpayers being required to make a claim in the High Court for restitution or compensation. If it could be decided that s78 provided a remedy, the position for taxpayers would be a great deal neater.