The decision of the CJEU in Littlewoods

In a deft piece of judicial handling the CJEU, in its judgment in the Littlewoods case (C-591/10), has left it to the UK Courts to decide whether HMRC must pay taxpayers compound interest on refunds of VAT paid in breach of EU law. The issue of entitlement now turns on whether the UK courts conclude that, having considered similar domestic interest claims, the principle of equivalence is infringed. In addition, simple interest must amount to an ‘adequate indemnity’ for a taxpayer's loss.