Top British companies have overpaid billions in tax - EU Court

(Reuters) - The British government might have to repay billions of pounds in multinational companies' corporation tax after the EU's highest court found in favour of British American Tobacco in a judgment delivered on Tuesday.

The European Court of Justice (ECJ) found that by taxing dividends earned from companies based in Britain differently from income gained abroad, Britain's treasury overcharged companies for decades.

"The UK legislation must be regarded as a restriction on freedom of establishment and on capital movements," the ECJ said in a statement, referring to basic tenets of the EU free market.

The case concerns differing treatment of income received in Britain and abroad.

http://uk.reuters.com/article/2012/11/13/uk-eu-court-idUKBRE8AC11J20121113