Although general defences to restitutionary claims are considered in Part V ofthis book, it is appropriate to consider particular issues relating to the application of defences to claims for restitution from public authorities, simply because the application of these defences has proved to be highly significant to the formulation of restitutionary claims and to the choice of which cause of action should be pursued.


It is clear from the earlier analysis in this chapter that the operation of different limitation periods has proved to be the prime trigger for choosing to found a claim on mistake or on the Woolwich ground, since, where mistake constitutes the ground of restitution[1] the limitation period does not start to run until the claimant did discover or could reasonably have discovered[2] that it had a claim,145 whereas for claims grounded on Woolwich the normal six-year limitation period applies.146 Limitation periods are legitimate as regards the San Giorgio claim for restitution of tax paid in breach of EU law by virtue of the need for certainty, as long as the period is reasonable.1

The significance of this extended limitation period for mistake based claims is now much reduced in significance. The key statutory provisions for restitution, relating to overpaid income tax, capital gains tax, and VAT,148 constitute an exclusive regime for restitution of those taxes where they apply, for which the limitation period is four years. Further, the application of the extended limitation period for claims grounded on mistake was retrospectively abrogated by statute,149 although the retrospective nature of these provisions have been held to infringe EU law in respect of their application to restitution of taxes paid in breach of EU law,150 by infringing principles of legitimate expectation, efficacy and effectiveness in not providing transitional provisions.

  • [1] to run once that court declared the payment of the tax to be unlawful: Test Claimants in the FII GroupLitigation v HMRC [2014] EWHC 4302 (Ch), [465] (Henderson J). Where, however, the unlawfulness of the
  • [2] tax has been resolved by the domestic courts, if the matter has been determined by the House of Lords orSupreme Court, time will only begin to run from that point, even if the unlawfulness of the tax has been
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