On 14 October 2011, the Court of Appeal published its decision in the Marks & Spencer (M&S) case1. Many of the principles of the case have already been settled, however, the Court of Appeal considered five key questions:
1. when the no possibilities test (NPT) must be satisfied;
2. whether sequential/cumulative claims are allowed;
3. whether all or some of the losses must meet the NPT;
4. should the principle of effectiveness allow M&S’s pay and file period claims to succeed; and
5. what is the correct method of calculating the overseas losses?
The issues in the case itself have been litigated through the English courts and at the European Court of Justice (ECJ) since 2002. However, in the current environment a reduction of the effective tax rate and a potential receipt of tax refunds are important issues for most companies and all taxpayers who have submitted such claims should now revisit those claims with a view to settling and asking for repayments. Those companies which now meet the conditions and are still able to make such claims should file their claims as soon as possible.