Littlewoods overpaid VAT to HMRC between 1973 and 2004. Between 2005 and 2008, HMRC repaid the principal sum of £205 million, together with simple interest of £268 million. Littlewoods brought proceedings against HMRC to seek additional interest, calculated on a compound basis as £1.25 billion, on the ground that such compound rather than simple interest is due under the common law of restitution, either as restitution for a mistake of law, or as restitution of tax unlawfully demanded (a "Woolwich" claim).
The Supreme Court's judgment was that (i) Littlewoods' common law claims for additional compound interest under common law were excluded by sections 78 and 80 of the Value Added Tax Act 1994 the ("1994 Act") as a matter of English law, and without reference to EU law and (ii) exclusion of the common law rights by the 1994 Act is not contrary to EU law, in light of the Court of Justice of the European Union's ("CJEU") judgment in Case C-591/10 Littlewoods. The Supreme Court found that the CJEU had given member state courts a discretion to provide reasonable redress in the form of interest in addition to the principal sum and that the payment of simple interest under the 1994 Act in this case cannot realistically be regarded as having deprived Littlewoods of an adequate remedy.
Littlewoods Limited and others (Respondents) v Commissioners for Her Majesty's Revenue and Customs (Appellant) Littlewoods Limited and others (Appellants) v Commissioners for Her Majesty's Revenue and Customs (Respondent)  UKSC 70.