Taxpayers are unlikely to be able to seek billions of pounds in compound interest from the taxman from overpaid VAT, according to senior European opinion.
The advocate general in the European Court of Justice has decided that overpaid VAT by UK taxpayers, due after HMRC breached European law, would only require simple interest applied to it.
Taxpayers had argued that the overpaid tax, some of which dates back to 1973, should be subject to compound interest.
However, advocate general Trstenjak said that taxpayers would be unlikely to be able to claim compound interest when delivering opinion on the Littlewoods case.
The advocate general's opinion is usually followed by the judges in the European court
