Via the ICAEW Tax Faculty, we learn:

The European Commission has decided to refer the United Kingdom to the EU's Court of Justice for abolishing the ‘remedy for repayment of taxes paid in mistake of law’ without proper transitional rules.

To cut a long story short, the House of Lords had ruled that taxpayers should have longer to reclaim taxes paid by mistake. The government didn't agree, so introduced laws specifically to prevent taxpayers from doing so. Because they did this without introducing fair transitional provisions, they broke EU law. So the Commission is now taking the UK to court to force them to treat taxpayers fairly.

It's a timely reminder of precisely why HMRC was so keen to settle with Vodafone. UK tax law must satisfy European requirements.  If it doesn't, then the EC will force the UK to come into line.

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Filed under: Taxation with tags european commission, hmrc, icaew, vodafone