UT/2023/000029 - [2024] UKUT 00079 (TCC)

The background to the appeal before the FTT is set out at §§17–22 of the FTT Decision and may be shortly summarised as follows.

TK imports materials such as aluminium into the UK, required for the process and supply of aircraft components to its customers. It was approved for IPR using the suspension system during the relevant period. Its authorisation required it to submit quarterly BoDs in Excel spreadsheet format, showing that goods imported under the authorisation had been discharged from the relief. It was required to maintain records of all IP transactions and retain associated documents in support of the BoDs, to be produced to HMRC on request.

TK’s imports during the relevant period were covered by authorisations issued in December 2013 (covering the period 1 January 2014 to 31 March 2014) and May 2014 (covering the period 1 April 2014 to 31 March 2016). The December 2013 authorisation stated that the relevant conditions were unchanged from TK’s earlier authorisation issued in November 2010 (covering the period 1 January 2011 to 24 June 2013).

The November 2010 authorisation specified a throughput period of 18 months, together with various other conditions summarised at §24 of the FTT Decision. The only condition in the November 2010 authorisation relating to TK’s BoDs was that:

“Suspension returns on form C&E 812 must be received by the supervising office within 30 days of the end of the throughput period stated at (15) above. The authorisation holder is responsible for ensuring that form C&E 812 is received by the supervising officer by the due dates. Failure to do so may result in relief being refused”.

The November 2010 authorisation also contained specific conditions about record-keeping, so as to enable HMRC to carry out audits and verifications. It is not alleged that there was any breach of these above conditions.

The terms of the May 2014 authorisation were substantially identical to those of the November 2010 authorisation, save that the throughput period was reduced from 18 months to six months.

TK was accordingly required to submit its BoDs together with HMRC’s form C&E 812. That form specified that the accompanying BoD should provide all the information required by Article 521 of the Implementing Regulation, and should be in a format that was readable and understandable by HMRC. The form stated that further information on the data required for a BoD could be found in Notice 221 of 22 May 2014. Notice 221 included the following statement:

“12.2

What is a BoD?

The BoD discharges your liability for Customs duties and Import VAT suspended at import and provides HMRC with the information we require for any assurance or audit checks that need to be carried out to make sure the conditions of IP procedure (which are laid down in EU law) have been met throughout the end to end process.

Periodic assurance checks or audits are undertaken on all Customs Procedures with Economic Impact. This is to make sure that IP traders are not obtaining an advantage over others without fully complying with the conditions of the procedure. The BoD should provide all the information required to trace the IP goods from the moment of entry to the moment of discharge from the procedure.

It should include references to all the relevant documentation used to enter and dispose of the goods such as CHIEF import and export declaration reference numbers etc. If an assurance check is then undertaken we are able to trace the movement of the IP goods using the declaration reference numbers.”

The Declaration at the end of form C&E 812 required the relevant trader to confirm that the information on the form was accurate and complete, and that all goods entered or received under IP had been accounted for in accordance with Article 521. The form warned that anyone who gave false information about goods declared under these arrangements might be liable to penalties under the Finance Act 2003.