Charles Kendall Freight Limited v The Commissioners for HMRC
[2024] UKFTT 492 (TC)
Drinks and Food UK Limited v The Commissioners for HMRC
16 November 2023
[2023] UKFTT 979 (TC)
First-tier Tribunal
A company tried to get back excise duty it paid on goods it exported. The tax office refused because of some paperwork problems and because it was too late to claim it back. The judge said the company could get some of the money back, but not all of it because it hadn't followed all the rules on stamping the goods and didn't have the right export documents for part of the shipment.
Key Facts
- •Drinks and Food UK Limited (Appellant) appealed HMRC's refusal of a £385,165.31 excise duty drawback claim.
- •The goods were imported and originally warehoused under duty suspension, but the warehouse keeper's authorisation was revoked in 2009 without notifying the Appellant.
- •The Appellant paid the assessed duty in 2014 and submitted a drawback claim in 2021, exceeding the three-year time limit.
- •HMRC rejected the claim due to several alleged breaches of conditions outlined in Excise Notice 207 (EN 207) and the Excise Goods (Drawback) Regulations 1995 (EGDR).
- •The Appellant argued that HMRC waived the time limit and that some alleged breaches were either minor or impossible to avoid due to post-Brexit changes.
Legal Principles
Excise duty shall be levied, collected, and where appropriate, reimbursed or remitted according to each Member State's procedure.
Article 9, Council Directive 2008/118/EC
Excise duty shall be reimbursed or remitted in the Member State where release for consumption took place if the other Member State's authorities find duty chargeable and collected there.
Article 33, Council Directive 2008/118/EC
The UK's provisions for drawback are in the Excise Goods (Drawback) Regulations 1995 (EGDR), authorised under section 2 of the Finance Act 1992 (No. 2).
Excise Goods (Drawback) Regulations 1995 and Finance Act 1992 (No. 2)
Drawback claims must be made within three years of duty payment, unless HMRC otherwise allows (Regulation 7(6) EGDR).
Regulation 7(6), EGDR
HMRC can impose additional conditions for drawback claims in published notices (Regulation 7(1)(b) EGDR).
Regulation 7(1)(b), EGDR
Public notices generally don't have force of law unless explicitly stated.
HMRC v KE Entertainments Ltd [2018] CSIH 78
Tax tribunals have no inherent judicial review jurisdiction but can challenge decisions on public law grounds unless the statutory scheme excludes it.
David Beadle v HMRC [2020] EWCA Civ 562
Outcomes
Appeal allowed in part.
HMRC unreasonably rejected the entire claim despite a waiver of the three-year time limit and the fact that parts of the claim met all conditions.
£9,695.27 of the claim allowed.
This portion of the claim was unaffected by the breaches of conditions related to duty stamp obliteration and export documentation.
Appeal refused for the remaining £272,980.74.
The Appellant failed to ensure duty stamps were obliterated in accordance with the DSR, a condition HMRC reasonably considered critical.
Appeal refused for the portion related to the April 2021 export.
Although the Appellant faced difficulties obtaining required export documentation due to post-Brexit changes, HMRC's decision to reject this part of the claim was not deemed unreasonable.