![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |
England and Wales High Court (Chancery Division) Decisions |
||
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Evonik UK Holdings Ltd & Ors v Commissioners of Inland Revenue & Anor [2025] EWHC 939 (Ch) (17 March 2025) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2025/939.html Cite as: [2025] EWHC 939 (Ch) |
[New search] [Printable PDF version] [Help]
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
REVENUE LIST (ChD)
Fetter Lane, EC4A 1NL |
||
B e f o r e :
____________________
EVONIK UK HOLDINGS LIMITED AND OTHERS ("Evonik") |
Claimant |
|
- and - |
||
(1) THE COMMISSIONERS OF INLAND REVENUE (2) THE COMMISSIONERS FOR HIS MAJESTY'S REVENUE AND CUSTOMS ("HMRC") |
Defendant |
____________________
Lower Ground 46 Chancery Lane WC2A 1JE
Tel No: 020 7404 1400
Email: civil@epiqglobal.co.uk
(Official Shorthand Writers to the Court)
____________________
Crown Copyright ©
MR JUSTICE RICHARDS:
Introduction
a. is entitled to restitution of capital sums;
b. it is entitled to interest under s85 (Section 85) of the Finance Act 2019 (FA 2019) in respect of certain unlawful ACT that was set off or repaid before it commenced proceedings; and
c. it is entitled to interest under section 35A (Section 35A) of the Senior Courts Act 1981 in respect of certain causes of action for restitution of unutilised ACT.
The various interest rates
a. First, it accrues under s85(3)(a) of FA 2019 from the date the ACT was paid until the date it is set off. That produces what Mr Bremner KC aptly describes as a "notional principal amount".
b. Section 85(3)(b) then provides for some measure of compounding because the notional principal amount itself attracts interest at the Section 85 rate until payment.
The discretion and the principles that I should apply when exercising it
a. Section 17 of the Judgments Act provides for interest on a judgment debt to accrue at 8 per cent from such time as may be prescribed by rules of court.
b. CPR 40.8 provides that interest at the Judgments Act rate is to begin to run from the date of judgment, but the court is given power to order otherwise. CPR 40.8(2) expressly envisages that the court can order that Judgments Act interest is to accrue from a date before judgment is given.
c. Section 52 provides for a rate different from the 8 per cent rate to apply to tax judgment debts such as Evonik's.
a. I need a good reason to provide for interest to start to accrue before judgment, but there is no need for the circumstances to be labelled as exceptional before I exercise discretion in that way.
b. The most important consideration is that my exercise of discretion should reflect what justice requires having regard to the purpose for which interest is awarded on debts, damages and costs.
What does justice require in this case?
Background
The proper exercise of discretion in this case
a. First, by analogy with DuPont Nutrition Biosciences ApS v Novozymes A/S, HMRC had admitted quantum and so could and should have paid by 10 May 2024.
b. Second, and relatedly, Evonik argues that it is right to hold HMRC to their agreement on quantum as to the date from which Section 52 interest would accrue. They argue that it would otherwise be inequitable and contrary to what justice requires, given that Evonik was held to its own admission in the December 2024 Judgment.
a. No actual agreement resulted (since the parties were at odds over the proper allocation of the £6.4m).
b. Such agreement as there was as to the outcome in the scenarios in contemplation on 17 June 2024 was rapidly overtaken by Evonik's attempt to withdraw its concession.
47. Nor do I agree that HMRC could or should have paid substantially earlier. They could not have paid on 10 May 2024 as there was no agreement then. There was no agreement on 17 June 2024 as to the amount due (because of the outstanding debate on how the £6.4m should be allocated). Between 17 June 2024 and 18 December 2024, there was no certainty as to the amount HMRC would have to pay since (i) the dispute as to the proper allocation of the £6.4m was at large until I gave judgment on 1 August 2024 dealing with that issue (and indeed that matter is still at large because there is to be an appeal to the Court of Appeal on this issue), (ii) if Evonik was permitted to withdraw its concession HMRC would have to pay more than it was expecting and (iii) if Evonik was permitted to withdraw its concession, HMRC had intimated that they were considering revisiting their own position on the correct rate of interest that should be awarded under Section 35A. Between 18 December 2024 and 17 February 2025, the lack of certainty continued since Evonik was seeking permission to appeal against the December 2024 Judgment.