AXA Insurance UK PLC and another (Appellants) v Commissioners of Inland Revenue and another (Respondents)

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Case summary

Case ID

UKSC/2025/0005

Parties

Appellant(s)

AXA Insurance UK Plc and AXA Insurance Plc (formerly Guardian Royal Exchange Insurance Plc)

Respondent(s)

Commissioners of His Majesty's Revenue and Customs

Issue

(1) Did the Prudential test case determine the date on which the limitation period starts to run for the purposes of section 32(1)(c) of the Limitation Act 1980 for all claims within the in the GLO? (2) Was the Court of Appeal correct to exercise its discretion under CPR 19.23(1)(a) to order that the determination in the Prudential test case of the Set-Off issue was not binding on the appellants’ claims?

Facts

The appellants, AXAIUK and GREA, are insurance companies that form part of the AXA corporate group. AXAIUK’s claim relates to corporation tax it paid on dividends it received from its minority shareholdings in non-UK resident companies. GREA’s claim relates to advance corporation tax (“ACT”) it paid on the dividends it declared and paid to its shareholders. The Controlled Foreign Companies and Dividend Group was formed by the making of a GLO order in July 2003. The claims within this GLO allege that the claimants paid tax under statutory provisions which are now accepted to have been incompatible with European Union law. The appellants’ claims were included in the GLO. The appellants’ claims were stayed pending determination of a number of test cases. One of those test cases was brought by companies in the Prudential group headed by Prudential Assurance Co Ltd plc (“the Prudential test case”). The appellants argue that the Prudential test case determined two issues in favour of the taxpayers and that those determinations are binding on the appellants claims in accordance with the GLO regime. The first issue is whether there is a common law claim for compound interest to compensate a claimant for the loss suffered by in effect paying ACT prematurely (“the Set-Off Issue”). The second issue is when the limitation period starts to run for the purposes of section 32(1)(c) (“the Limitation Issue”). HMRC argue that the court should exercise its discretion under CPR 19.23(1)(a) to order that the Prudential test case decision on the Set-Off Issue should not bind GREA’s claim. HMRC further submit that the Prudential test case did not in fact determine the Limitation Issue as a common GLO issue. Accordingly, the appellants’ claims should be determined by applying the law as it currently stands. The Court of Appeal found in favour of HMRC. The appellants now appeal to the Supreme Court.