Charlene Hughes v The Commissioners for HMRC
[2024] UKUT 108 (TCC)
Qais Majeed Ali v The Commissioners for HMRC
18 June 2024
[2024] UKUT 176 (TCC)
Upper Tribunal
Mr. Ali was caught with untaxed tobacco. He said he worked for a company that owned the tobacco, but the judge said he was responsible because the tobacco was in his van and storage unit, and he paid for it. Even though there might have been someone else responsible earlier in the supply chain, Mr. Ali didn't provide enough proof, so he still had to pay the taxes.
Key Facts
- •Mr. Ali appealed an excise duty assessment of £55,470 for duty unpaid shisha tobacco seized from his van and lock-up unit.
- •Mr. Ali claimed he was a part-time driver for Palm Palace Ltd, which owned the van, lock-up, and a shisha café, and bought the tobacco on their behalf believing duty was paid.
- •The FTT dismissed Mr. Ali's appeal.
- •The Upper Tribunal (UT) considered two main grounds of appeal: (1) whether HMRC should have assessed the supplier, and (2) whether Mr. Ali had sufficient control over the tobacco to be considered 'holding' it.
Legal Principles
Excise duty point is when goods are released for consumption in the UK (Regulation 5). Goods are released when held outside a duty suspension arrangement and UK excise duty hasn't been paid (Regulation 6(1)(b)). The person holding the goods is liable for the duty (Regulation 10).
Excise Goods (Holding, Movement and Duty Point) Regulations 2010 and Council Directive 2008/118/EC
HMRC must assess the earliest identifiable duty point; assessing a subsequent holder is challengeable if an earlier duty point can be established.
Davison & Robinson Limited v HMRC [2018] UKUT 0437 (TCC)
To challenge an assessment, one must show: (1) who had physical possession at the earlier duty point; (2) who had de facto/legal control; (3) the time of the duty point; (4) the location. The burden of proof is on the challenger.
Dawson’s (Wales) Ltd v HMRC [2019] UKUT 0296 (TCC) and [2023] EWCA Civ 332
'Holding' requires considering physical possession, but also whether the circumstances make it inappropriate to consider that person the holder. Physical possession is not determinative.
Agniezska Hartleb t/a Hartleb Transport v HMRC [2024] UKUT 00034 (TCC)
Knowledge that goods are duty unpaid is irrelevant to liability.
Case C-279/19 Commissioners for Her Majesty’s Revenue and Customs v WR and HMRC v Martyn Perfect [2022] EWCA Civ 330
Outcomes
Appeal dismissed.
The UT found the FTT erred in law by confusing recoverability with the ability to assess regarding an earlier duty point, but this error was immaterial because Mr. Ali failed to provide sufficient evidence to identify an earlier liable party.
The FTT's finding that Mr. Ali was 'holding' the tobacco was upheld.
Mr. Ali had physical possession, and the FTT correctly rejected his claim of being merely an employee of Palm Palace based on the evidence (rental agreement, insurance, and payment for goods in his name).