David Jetuah, Accountancy Age, Thursday 30 September 2010 at 12:50:00

European Commission warns that the UK may face a referral to the European Court of Justice if the six-year limit for the reimbursement of taxes which are levied in breach of EU law is not extended

European mandarins have put pressure on the UK to change parts of the 2007 Finance Act relating to the length of time people can claw back money from taxes levied incorrectly - or face a referral to the courts.

The European Commission said the UK's policy on reimbursements of tax levied in breach of EU law should be changed because the repayments only apply for a six-year period.

The EC is concerned that the limit contravenes the rights of taxpayers because judgments on whether a levy is unlawful may be handed down after the six-year period.

"In the absence of a satisfactory response the commission may refer the United Kingdom to the EU's Court of Justice," the EC said in a press statement.

Further reading:

Group relief payouts expected after EC move