The billionaire Barclay Brothers, owners of the Telegraph newspapers, have won a major victory against the taxman after a judge decided their Littlewoods/Shop Direct mail order empire should be refunded what could be more than £1.2bn of interest on decades of overpaid VAT.
Their victory came just a day after HMRC was rejoicing over its success in a far smaller, separate court case against the brothers' Littlewoods/Shop Direct operations.
Today's judgement related to how interest was calculated on VAT overpaid by Littlewoods for almost 30 years.
It is one of the closest-watched big business tax battles in the City and has been rumbling through the courts for years.
The secretive brothers' legal team successfully argued that their company's repayment should include interest calculated on a compound basis.
A spokesman for the Littlewoods group said: "We welcome today's High Court ruling handed down by Mr Justice Henderson, which confirms that the claims for compound interest "succeed in full". The judgement provides a clear and robust resolution to complex issues raised by English and European law."
However, HMRC has indicated it intends to apply for permission to take the judgement to the Court of Appeal.
A Littlewoods spokesman said any rebate, when the various appeals run their course, would be subject to corporation tax.Reuse content