As reported in our June newsletter, the Supreme Court began hearing HMRC’s appeal in the Littlewoods compound interest case on 4 July 2017. The principal issue before the Supreme Court for determination was whether the UK’s interest provisions provide claimants with “adequate indemnity”.

On 5 July 2017, the Supreme Court halted proceedings, indicating that it was inclined either to find in favour of HMRC on both of the issues before it, or to refer questions to the CJEU on the meaning of “adequate indemnity”. A finding in HMRC’s favour would mean Littlewoods would have to establish that payment of simple interest is contrary to EU law. If, however, a reference is made, this issue is likely to fall away.

The Supreme Court’s judgment is expected in Autumn 2017.

A copy of the Court of Appeal’s judgment in Littlewoods is available to view here.