Unjust enrichment: Some items to consider: Factors not supporting the unjust enrichment defence
If some or all of the following factors are present it will probably be difficult to invoke successfully the unjust enrichment defence
- Customers are not VAT registered
- Customers are mainly private consumers
- The industry or market sector is not particularly competitive (possibly containing only a few large businesses)
- One or only a few of many businesses in a competitive industry overstated VAT
- The overtaxed product is price elastic (potential buyers tend to be sensitive to price rises)
- No change was made to prices when VAT was introduced
- The product has many close substitutes
- The incorrect VAT treatment has been of only short duration.
If all of the above elements are observed in a claim it is unlikely we shall be able to invoke successfully the unjust enrichment defence.