In a landmark judgment in Sempra Metals Ltd v Commissioners of Inland Revenue and another  HL 34 given on 18 July 2007 the House of Lords found that Sempra Metals Ltd (Sempra) was entitled to claim compound interest from HMRC on payments of advance corporation tax (ACT) which were made by Sempra in respect of dividends paid to its then German parent company.
The case follows a string of decisions which have developed the scope for claims against HMRC for monies paid by way of tax pursuant to legislation which it is claimed is unlawful. The judgment is significant to Sempra and to other companies in the same position as Sempra, as well as potentially to all claimants bringing claims in either restitution or damages for loss of use of money, whether against HMRC or any other party.
This article examines the decision in Sempra and its wider relevance, including the background to the decision and other relevant developments during the course of Sempra’s claim.
This article was originanlly produced for Tax Journal.
Sarah Lee (partner)
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