Petmaster Limited v The Commissioners for HMRC
[2024] UKFTT 718 (TC)
WF & L Limited v The Commissioners for HMRC
7 September 2023
[2023] UKFTT 754 (TC)
First-tier Tribunal
A company imported vehicles from Turkey and declared them incorrectly. They tried to fix it by claiming a special deal (0% tax) but couldn't prove they met all the rules (needed a special document and evidence the parts used were properly imported into Turkey). The judge said no, they owe the tax.
Key Facts
- •WF & L Limited (Appellant) received a post-clearance demand from HMRC for £768,742.57 duty and £153,748.51 VAT.
- •The demand concerned 85 import entries of vehicles manufactured in Turkey and transported via Spain and Gibraltar to the UK.
- •The vehicles were initially declared under the incorrect customs procedure code for returned goods relief (RGR).
- •The dispute centered on whether the Appellant could amend the import declarations to claim preference from Turkey (0% duty), requiring an A.TR document.
- •The vehicles were transported under duty suspension with T1 documents but lacked A.TRs.
- •The Appellant attempted to obtain retrospective A.TRs but was unsuccessful due to issues with the manufacturer, Ford Otosan (FordO), regarding the vehicles' origin and production using inward processing relief parts.
- •The vehicles were right-hand drive, raising questions about their intended destination.
Legal Principles
Goods may be imported into the EU under preferential rules (0% duty) from Turkey if certain requirements are met, as detailed in Decision No 1/2006 and Council Decision No 1/95.
Council Decision and Turkey Decision
Proof of meeting preferential rules 'shall' be provided by an A.TR document. Specific requirements exist for goods transported through third countries under duty suspension.
Turkey Decision (Articles 5, 6)
Customs authorities may amend a customs declaration after release of goods, subject to conditions and time limits under Article 78 of the Community Customs Code (CCC) and Article 173 of the Union Customs Code (UCC).
Article 78 CCC, Article 173 UCC
For Turkish preference to apply, goods must be in free circulation in Turkey; if manufactured from third-country parts, those parts must also be in free circulation before export.
Council Decision (Article 3)
Outcomes
Appeal dismissed.
The Appellant failed to prove the vehicles were eligible for Turkish preference because there was insufficient evidence that the parts used were in free circulation in Turkey before export. The absence of A.TRs further prevented the claim.
Amendment of the customs declaration was not permitted.
While amendment might have been possible with retrospective A.TRs and proof of preference, the Appellant failed to prove eligibility for preference. The absence of A.TRs was a critical factor.