DELUXE PROPERTY HOLDINGS LTD v SCL CONSTRUCTION LTD

[2020] EWHC 3354 (TCC), Technology and Construction Court, Pepperall J, 8 December 2020

Overpayment of VAT – Whether overpayment held on trust for payee

The claimant employed the defendant to carry out building works and it paid VAT in respect of these works at the rate of 20 per cent. The works were, in fact, zero-rated for VAT purposes. The defendant subsequently obtained reimbursement from HM Revenue and Customers (HMRC) in respect of the overpaid tax by way of an accounting credit against its liability in the subsequent quarter.