LONDON (Bloomberg) - Conde Nast Publications Inc. won a bid to force the UK government to return £115,000 ($225,000) in overpaid taxes in a court ruling that will allow other companies to seek millions more.

The House of Lords, the UK's highest court, ruled that the government was not entitled to deny companies' tax claims that go back more than three years. It backed the magazine publisher's claim to recover overpaid sales tax paid on employee entertainment costs between 1973 and 1997.

Conde Nast, the publisher of Vogue and Vanity Fair magazines, was seeking the return of "value-added-tax," a sales duty used across the European Union. The ruling will be a financial blow to the UK, said George Bull, the head of tax at accounting firm Baker Tilly in London.

"This is potentially going to cost the Exchequer hundreds of millions or billions at a time when taxpayers' resources are being depleted by the need to support Northern Rock," he said in a telephone interview.

Any business that may have overpaid VAT between 1973 and 1996, can now make a claim, Tony McClenaghan, head of indirect tax at accounting firm Deloitte & Touche LLP, said in a telephone interview. Deloitte advised Conde Nast in the dispute.

While the number of companies that will be able to take advantage of the ruling is "significant," only the HM Revenue & Customs, the U.K.'s tax office, will know the number of claims already lodged, Mr. McClenaghan said.

HM Revenue & Customs said it is reviewing the decision.

Conde Nast is a unit of New York-based Advance Publications Inc. The government introduced the three-year time limit on claims for overpaid tax in 1997, changing it from six.

The House of Lords ruled today that the way the government made the change broke European Union law because it was retrospective and made no provision for "transitional arrangements."

To be compatible with EU law the government should have given taxpayers proper warning of the changes to "enable them to submit late accrued claims for the deduction of input tax despite the introduction of the time limit," Lord James Hope said in the judgment.