TC09661 - [2025] UKFTT 01227 (TC)

The effect of BSS’ contention is that hardship would not be engaged in any drawback claim: a drawback claim is a request for repayment (whether directly or by way of setoff against another debt). A refusal of such a claim will never directly determine an amount of duty to be payable as it can only confirm that an amount of duty should not be repaid.

s16(3) FA 1994 nevertheless includes decisions in respect of drawback within the definition of “relevant decision”. It is therefore clear that Parliament intended that decisions in respect of drawback should be subject to the hardship provisions.

BSS also contended that “taxpayers might have to deposit an amount equivalent to the amount they were seeking to return” would apply equally to appeals regarding disallowed input VAT on a repayment return. It is well established that the hardship provisions apply in such a case. BSS’ further contention that the statute requires a determination that a payment to HMRC is now required that was not required before is adding words to the legislation that are not there; the words of the statute are clear and do not require that addition. All that is required is a determination that an amount be payable “in relation to that decision”.

The statute reference is to an amount determined “in relation to that decision”, rather than an amount imposed by the decision. A drawback claim would (if successful) reduce the amount of duty in dispute or (if unsuccessful) confirm that duty amount in full. I conclude that the drawback claim decision therefore determines that an amount of duty is payable.

I consider that, as HMRC have refused drawback in respect of an amount of duty, they have therefore made a decision that determines that the amount of the original assessment remains payable. That is, in my view, a determination that an amount of relevant duty is payable and is a determination made “in relation to that [drawback] decision”.

It therefore follows that the hardship provisions do apply and so the amount of duty must be paid or deposited, or hardship granted, before the appeal can be entertained.

However, I do not consider that it is appropriate to strike out this appeal immediately: as the question of hardship has been in dispute, it is not particularly surprising that no payment, deposit, or application has been made in respect of the decision under appeal. This part of the strike out application is therefore refused.

BSS suggested in the hearing that the grant of hardship in a previous appeal should, in effect, be read across to apply to this appeal because it related to the same amount. I do not agree; this is an appeal against a different decision, even if it involves the same amount, and the statute is clear that this appeal, against that different decision, requires resolution of hardship before it can be entertained by the Tribunal.

If this appeal is not otherwise struck out (noting that there are other aspects of the application), I consider that the appropriate course of action is to stay the appeal for a reasonable period of time to enable the hardship provisions to be complied with.