Upper Tribunal Tax and Chancery Chamber

UT/2019/000009 - [2024] UKUT 00176 (TCC)

Fecha: 16-Abr-2024

Assessment of earlier duty point

Assessment of earlier duty point

In B & M Retail Limited v HMRC [2016] UKUT 429 (TCC) the Upper Tribunal held that even though in principle an earlier release for consumption must have occurred, that did not preclude HMRC assessing a person holding excise duty goods in respect of which excise duty had not been paid.The decision as to which of the various persons that had held the goods should be subject to excise duty assessment was at the discretion of HMRC.

However, in Davison & Robinson Limited v HMRC [2018] UKUT 0437 (TCC) the Upper Tribunal endorsed HMRC’s acceptance that HMRC was obliged to assess, as a matter of law and not merely discretion, against “the earliest point in time at which [HMRC] are able to establish, on the evidence before them, that excise goods have been held outside a duty suspension arrangement” ([79]). That was consistent with the Upper Tribunal’s analysis that the 2008 Directive required an assessment to be made against the first established excise duty point. If HMRC assessed anyone other than the first holder they could identify, it would be open to that person to challenge the assessment on appeal to the FTT ([80]).

10.

Earlier (at [67]) the Upper Tribunal had observed that “Clearly, HMRC cannot make an assessment until it has the necessary information on which to establish “when, how, where and by whose acts the excise duty point occurred…”.

11.

In Dawson’s (Wales) Ltd v HMRC [2019] UKUT 0296 (TCC) the Upper Tribunal summarised the points which a person would have to show in order to successfully challenge an assessment on the basis that an earlier duty point could be established against which HMRC should have made an assessment (at [149]) (the burden of proof being on the party seeking to challenge the assessment – see [74] and [94] of Dawson’s (Wales) Ltd v HMRC [2023] EWCA Civ 332):

(1)

Who had physical possession at the time the alleged earlier excise duty point occurred?

(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 and how that person is said to have such control and the basis on which it was being exercised?

(3)

The time at which the excise duty point arose. (The Upper Tribunal’s view was that the date of an invoice was not sufficient in itself without establishing who was in possession of the goods at some identified point or points in time.)

(4)

Where the goods were being held at the relevant time.

12.

On appeal, the Court of Appeal endorsed the relevance of all these factors. At [77] it endorsed (1) (physical possession); Asplin LJ considered that was supported by the CJEU’s decision in the Perfect case and there “the touchstone was the physical possession of the excise goods”. The Court also endorsed points (3) and (4) (timing and location) (at [94]) and noted that (2) (regarding de facto or legal control) was not challenged ([86]).

13.

The Court also (at [83]-[84]) considered that the UT in Dawson’s had been correct to rely on the passage at [67] in Davison & Robinson, regarding HMRC not being able to make an assessment unless it had the necessary information (see [9] above).