Evonik UK Holdings Limited & Ors v The Commissioners of Inland Revenue & Anor

The court has discretion to direct that statutory post-judgment interest on a tax judgment debt runs from a date before judgment. The governing question is what justice requires, having regard to the purpose of interest. A party need not show exceptional circumstances. Fact-specific decisions do not establish general rules that interest begins only when the debtor could reasonably have paid, or only when the amount due was previously clear. Earlier calculations or provisional agreement may be relevant, but their effect depends on the circumstances and whether later events have overtaken them. Here, interest was ordered to run from the date on which permission to appeal was refused, when the amount payable became sufficiently certain.

Evonik’s claim arose from the Franked Investment Income Group Litigation and had been remitted following the Supreme Court’s judgment in [2021] UKSC 31. The parties agreed that Evonik was entitled to restitution and specified statutory interest, and that the resulting judgment debt attracted interest under section 52 of the Finance (No 2) Act 2015.

The dispute concerned the commencement date for that interest. Evonik sought 10 May 2024, relying on HMRC’s earlier calculations and alleged agreement. HMRC contended for the date of the final order. The court rejected Evonik’s proposed date and selected 17 February 2025.

1. Discretion. Section 52 of the Finance (No 2) Act 2015 changes the rate applicable to relevant tax judgment debts but does not alter the principles governing commencement of interest under section 17 of the Judgments Act 1838 and CPR 40.8. The court therefore had power to direct an earlier commencement date.
2. Applicable principle. Following Fattal v Walbrook Trustees (Jersey) Limited [2009] EWHC 1674 (Ch), a good reason is required before interest is backdated, but exceptional circumstances are unnecessary. The decisive consideration is what justice requires. Involnert Management Inc v Aprilgrange Limited [2015] EWHC 2834 (Comm) did not establish a general rule that interest can begin only when the paying party could reasonably be expected to pay. DuPont Nutrition Biosciences ApS v Novozymes A/S [2013] EWHC 483 (Pat) likewise did not establish that earlier certainty as to the amount due is a precondition.
3. Application. HMRC’s calculations did not amount to an unconditional agreement that interest would run from 10 May 2024. The continuing dispute over allocation of £6.4 million, Evonik’s attempted concession withdrawal and uncertainty over the amount and applicable interest rate meant that the earlier date had been overtaken by events.
4. It was just that Evonik should bear the consequences of the process it had initiated. Section 52 interest was ordered to accrue from 17 February 2025, when permission to appeal against the December 2024 judgment was refused and the methodology governing the sum payable was known.

This was a first-instance decision concerning the final form of order in proceedings remitted following the Supreme Court’s judgment in [2021] UKSC 31. Permission to appeal against the December 2024 judgment was refused by the Court of Appeal on 17 February 2025.