TC09667 - [2025] UKFTT 01254 (TC)

Fecha: 27-Ago-2025

Conclusions

Conclusion

84.

Turning to the four factors that the Upper Tribunal in Hartleb considered relevant to the question of holding:

(1)

who had physical possession at the time that the alleged earlier excise duty point occurred: at the relevant time Kami was clearly in possession of the Goods. They were in a room that was padlocked by him and only he had the key. Although he only had access to the room at certain times of the day, he was the only person with a key giving access. The lock on the door was not “symbolic” as HMRC suggested in closing submissions, but a practical and effective way of restricting entry. Whilst Len Lothian had legal ownership of the unit, as a practical matter they operated on the basis that there was a valid self storage licence agreement and would not enter unless the storage fee was unpaid.

(2)

who is the person alleged to have de facto or legal control over the goods who it is said should be assessed rather than the subsequent holder (if it is the case that the courier was an innocent agent and it is not appropriate to assess the courier), and how that person is said to have such control and the basis on which it was being exercised: likewise Kami appears to be the legal owner of the Goods. He has control over the Goods for the reasons already discussed at (1) above;

(3)

the time at which the excise duty point arose: it is common ground that the duty point arose when HMRC discovered the Goods.

(4)

where the goods were being held at the relevant time: the Goods were in a storage unit that was legally the property of Len Lothian, which they would have had a legal right to enter. But the unit was locked with a padlock to which Kami had a key, but not Len Lothian. As a practical matter Len Lothian would not have entered the unit unless the storage fee was unpaid.

85.

On any reasonable use of everyday language, at the relevant time:

(1)

Len Lothian cannot be said to have been either in possession of the goods or holding them; and

(2)

it can only be Kami who is said to be in possession of the Goods and holding them.

86.

Kami, of course, has not been identified. We accept there may be circumstances (such as the employer/employee example of the Advocate General in WL, or where there is collusion, or a person deliberately withholds information) where the inability to identify person A may make person B liable, but we do not consider this to be one of those circumstances. We note the authority for such circumstances from WL and Hartleb relates to employment situations, which is not in point here. More fundamentally, we consider that liability cannot be so attributed to person B unless they can be said to be holding or in possession of the relevant goods applying the usual meaning of those terms in everyday language, taking into account the context in which they are used and the objectives pursued by the legislation of which they form part.

87.

We accept, as discussed at [19] above, part of the objective of the 2008 Directive is to ensure that the excise duty is collected and a key policy consideration is that those engaged in commerce assume the risk of being liable for the actions of those with whom they do business. However, that cannot permit such a strained and unnatural interpretation of “held” or “possession” as to find Len Lothian held the goods or were in possession of them.

88.

It follows that the Appeal in relation to the Assessment must be allowed.

89.

Given the concession noted above at [5] it also follows that the appeal against the Penalty must also be allowed.

Right to apply for permission to appeal

90.

This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.

Release date: 17^th OCOTBER 2025