Adviser Q&A: Reed Employment: when can overpaid VAT be recovered?

In Reed Employment Ltd v HMRC [2014] EWCA Civ 32 the issue before the Court of Appeal was whether FA 2005 s 3 which provided HMRC with the unjust enrichment defence against claims for repayment of VAT infringed the EU principles of equal treatment and fiscal neutrality.

How does the limitation operate for recovering overpaid VAT?

On 27 March 2009 Reed Employment Ltd (Reed) submitted claims for overpaid VAT for the periods 1973–90 and 1991–95.

The first question to answer here is ‘how’? The question arises because claims for overpaid VAT are normally subject to strict time limits. In order to answer this question we need to overview the history of time limit restrictions on the right to recover overpaid VAT and the associated case law.

Historically no caps had...