Oct. 2--Vodafone and HSBC were among hundreds of UK companies who were last night trawling through their records in the hope of claiming back billions of pounds from the taxman.

Following an explosive ruling from the European Court of Justice, British firms are together expected to ask for as much as £5bn in over-paid stamp duty.

The Luxembourg court has found that Her Majesty's Revenue and Customs has been taxing UK firms too much for overseas takeovers.

The decision relates to deals that were funded through the issue of new shares -- a routine way for British companies to pay for blockbuster acquisitions.

The momentous judgment could trigger thousands of claims as HMRC has been overcharging companies since introducing stamp duty on share deals in 1986.

Auditors PricewaterhouseCoopers believes that firms will attempt to re-claim "at least £5bn" over the coming years.

"This is a landmark ruling," said PWC partner Craig Leslie. "UK companies that have carried out cross-border mergers and acquisitions since 1986 will be considering whether they have a reclaim."

The prospect of mammoth claims come at just the wrong time for the Chancellor Alistair Darling, who is struggling to contain an unprecedented rise in the national debt.

The European judgment came after banking giant HSBC asked for a £27m rebate following its £7.8bn takeover of French bank CCF in 2000.

HSBC had to pay a 1.5pc rate of stamp duty on the shares it issued to French investors at the time.

The bank claimed this was unfair as the taxman normally charges a 0.5pc stamp duty on share deals.

Her Majesty's Revenue and Customs last night said it would stop levying the 1.5pc tax immediately on share transactions in the European Union.

It insisted that the ruling would only hit a small part of the overall tax yield -- estimated at just "tens of millions" of pounds a year.

But tax lawyers believe the bill will be far higher.

Banks and oil giants such as Shell and BP have issued billions of shares to pay for overseas acquisitions over the past two decades.

In total, British firms have paid an estimated £25bn in stamp duty down the years, although not all of this can be clawed back.

Vodafone, for instance, is expected to put in a relatively modest claim even though it paid for its £112bn takeover of German rival Mannesmann entirely in shares.

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