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As a general rule, a taxpayer has the right to repayment of overpaid tax¹. Consequently, an appeal lies to a VAT tribunal against a decision of HMRC with respect to a claim for repayment or credit under the foregoing provisions². However, it is a defence, in relation to a claim, that repayment/credit would unjustly enrich the claimant³.

The purpose of unjust enrichment is considered by HMRC to 'prevent businesses from being enriched at the expense of their customers who, for all practical purposes, bore the burden of the wrongly charged VAT… It is not a question of whether the enrichment was unjust in subjective or moral terms but whether the VAT was added to the price charged by the claimant; whether the claimant would have charged less had he known that his supplies were not liable to VAT.'⁴.

The burden of proof as to whether unjust enrichment exists was described in the following terms by the Advocate-General in a case before the European Court of Justice⁵:

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