TC09657 - [2025] UKFTT 01208 (TC)

The Appellants say that HMRC’s alleged errors include issuing a decision letter/C18 to an Appellant in respect of importations of products for which the Appellant was not the declarant on the corresponding customs declaration. The Appellants say they have provided evidence that import entries have been included on C18s where the recipient of the C18 is not the entity which was the declarant, and the import paperwork shows that another entity was the declarant. Whether this is the case or not is a matter for determination at the substantive hearing. What I need to decide is whether, if HMRC have in fact issued a C18 to the “wrong” Appellant, the Tribunal can correct that.

Perhaps unusually, the Tribunal is seized of appeals by three Appellants which will all be heard together, and so it is likely that, if HMRC did issue a C18 to the “wrong” person, the “right” person (to whom HMRC should have issued the C18) will be party to proceedings before the Tribunal at that time. It is against that background that I need to decide whether, if the Appellants are right and HMRC has notified a customs debt to the wrong entity (which happens to be an Appellant which is appealing that notification), the Tribunal can determine that another Appellant (which is the declarant on the corresponding customs entry and therefore is the entity to which HMRC should have notified the debt) is the true debtor. The exact question Judge Citron posed is: In such cases, does the Tribunal have power to decide that the Appellant in question is liable for the customs debt in question? This occasioned yet another disagreement between HMRC and the Appellants about the scope of a preliminary issue. The Appellants say that the question is asking whether the Tribunal can determine that a different Appellant is the true debtor in a way which makes it liable for the debt. HMRC say that the question is just asking whether the Tribunal can determine that another Appellant is the true debtor and questions of liability/enforcement (Can HMRC do anything with/about the decision?) are a separate issue for another day.

I am with the Appellants on this point. The question Judge Citron posed very clearly asks whether the Tribunal can decide that a particular Appellant is liable for the customs debt in question, not just whether a particular Appellant is the declarant/customs debtor. We can see that if we compare the final version of the question with the initial version in the Appellants’ skeleton argument for the CMH: “Where HMRC has issued a C18 to an entity which is not the customs debtor, does the Tribunal have the power to vary the decisions to change the customs debtor?” To the extent there is ever anything between being a customs debtor and being liable, the final version of the question clearly focuses on whether the Tribunal can decide that a particular Appellant is liable for the customs debt, not just whether they are a customs debtor. The preliminary issue is linked to HMRC’s pleaded case that, to the extent that they had identified the wrong declarant, “the Respondents will invite the Tribunal to vary the decisions accordingly so that Universal Cycles is liable for the additional duties in respect of such importations”: paragraph 105 of HMRC’s Consolidated Re-Amended Statement of Case.

As I have already hinted, there is a separate issue between the parties about who the declarant is in certain circumstances, but this is not something I need to decide as a preliminary issue. I am concerned only with the situation where A turns out to be the declarant, the customs debt was notified to B by HMRC, and A and B are both Appellants. The question for me, in such a situation, is whether the Tribunal can decide that A is liable for the customs debt.

For completeness, I should say that I do not agree with HMRC’s complaint that it had no notice that it would have to address the issues of entry in the accounts and communication of a customs debt, which I will turn to in a moment. As Ms Sloane observed, HMRC pleaded the purported power of the Tribunal to render a person liable to pay a new amount without identifying any basis for it. The Appellants, whose skeleton was filed first, noted HMRC’s failure to give any explanation for their radical (as they described it) proposition and submitted that any such “variation” by the Tribunal “would, in substance and effect, be purporting to issue a fresh liability decision against a third party, in breach of the requirements of the CCC or UCC on the notification of a debt and the EU law principle of legal certainty” This notwithstanding, as set out above, I invited HMRC and the Appellants to send written submissions on this issue after the hearing.