Investment Trust Companies v Revenue and Customs Commissioners

The case of Investment Trust Companies v Revenue and Customs Commissioners was a UK Supreme Court decision involving claims for the repayment of undue VAT. The Investment Trust Companies (ITCs) sought repayment of VAT charged by their investment managers, who had mistakenly charged the VAT due to incorrect UK legislation. The ITCs claimed that they were entitled to restitution from the Commissioners for Her Majesty’s Revenue and Customs (HMRC), who had received the VAT from the investment managers. The ITCs argued that the Commissioners were unjustly enriched at their expense. The Court of Appeal had held that the ITCs had a common law claim against the Commissioners for unjust enrichment, but that the claim was excluded by section 80 of the Value Added Tax Act 1994. The ITCs appealed to the Supreme Court, arguing that the exclusion was incompatible with EU law. The Supreme Court held that the ITCs did not have a common law claim against the Commissioners, as there was no transfer of value from the ITCs to the Commissioners. The ITCs' payment of the VAT was made to the investment managers, who were under a contractual obligation to pay the VAT to the Commissioners. There was no direct causal link between the ITCs' payments and the Commissioners' enrichment. Furthermore, section 80 of the 1994 Act provided an exhaustive statutory scheme for the reimbursement of undue VAT, which impliedly excluded common law claims by consumers. The statutory scheme was consistent with EU law, which required member states to provide a means for consumers to recover undue VAT, either directly from the supplier or indirectly through the supplier's claim against the tax authorities.