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The club claim they are owed outstanding funds in ‘compound interest’, despite recently receiving a £61,000 rebate in VAT from HMRC.

 

They believe the money is owed after incorrectly being charged VAT on its £18m flotation in 1991.

 

Manchester United joins a group of taxpayers petition the High Court whilst another group are appealing to the First Tier Tribunal and the Court of Appeal.

 

Both groups of taxpayers are arguing that compound interest should be paid on VAT refunds rather than simple interest.

 

However, retail chain Littlewoods lost a case against HMRC last month after they failed to convince the High Court that HMRC should pay approximately £1bn in compound interest on £200m of VAT that the company is owed.

 

The High Court ruled that simple interest should be paid.

 

This decision is to be referred to the European Court of Justice and is far from being resolved.

 

HMRC are likely to strongly contest the claims that compound interest should be paid especially as the deficit to the Treasury has been so widely highlighted in recent months.

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