When claims for repayment of overpaid tax or duty are made,
the Department is entitled to refuse repayment if the claimant
would be unjustly enriched. Broadly speaking this is where a
claimant would get a windfall profit, because the tax or duty that
they are seeking to recover was effectively paid by the consumer
and the claimant is not planning to pass the refund back to the
consumer. For Landfill Tax, the reference is the Finance Act 1996,
Schedule 5, paragraph 14(3).
Before the unjust enrichment provisions were amended by the
Finance Act 1997, a business which accepted that it would be
unjustly enriched would receive a refund of sums overpaid as tax if
it agreed to reimburse (repay) those consumers which for practical
purposes had paid the tax. However, the law did not say how that
refund should be made, nor did it provide a sanction where a
business reneged on the agreement.
