Like Littlewoods, Grattan relates to the recovery of overpaid VAT on the supply of goods paid by catalogue agents. The principal sums are disputed by HMRC since they relate to periods which pre-date the implementation of the 6th Directive. A reference to the ECJ was ordered by the First Tier Tribunal earlier this year on this issue. A further question which remained for the Upper Tribunal was whether or not to refer a question relating to the availability of compound interest. Grattan argued (like Wilkins) that compound interest is necessary to give an effective remedy to the taxpayer where it has overpaid VAT, and that the Statutory Tribunals are required to extend their own jurisdiction to give effect to this EU Law right. A further point advanced by Grattan is that, if it is entitled to compound interest, it is contrary to the principle of effectiveness to require it to seek its remedy from two courts (principal and simple interest in the Tribunal and compound interest in the High Court). HMRC argued that the Court of Appeal had already refused a reference on essentially the same point in Wilkins pending the outcome of Littlewoods. The Upper Tribunal in Grattan found that the FTT had properly exercised its discretion in deciding to refer this point and that it was not bound to refuse as a consequence of the Court of Appeal's decision in Wilkins.
The issue does seem a little academic, as by issuing claims in both jurisdictions, the whole controversy could be avoided at a nominal cost.