UT (Tax & Chancery) UT/2023/000087 - [2025] UKUT 00176 (TCC)

Recital (12) of the UCC recognises that important legal changes had occurred since the CCC had come into force. Recital (15) recognises that the facilitation of legitimate trade and the fight against fraud require simple, rapid and standard customs procedures and that it was appropriate to simplify customs legislation to allow the use of modern tools and technology and to promote efficient and simple clearance procedures. Customs procedures should be reduced to those that were economically justified with a view to increasing the competitiveness of business.

Recital (34) stated that the rules for “special procedures”, which now included end-use, should allow for the use of a single guarantee for all categories of special procedures. Recital (47) stated that there should be common and simple rules for special procedures, supplemented by a small set of rules for each category of special procedure, thus making it simple for operators to choose the right procedure and avoid errors.

Whilst the UCC was introduced with effect from 1 May 2016, the 2016 Tariff was not amended and continued to cross-reference to the CCC provisions in relation to end-use. The 2017 Tariff changed the cross-references to the UCC provisions with effect from 1 January 2017.

“Special procedures” are dealt with under Title VII Chapter 1 of the UCC. It is relevant that end-use became a special procedure pursuant to Article 210(c), along with other procedures which had been customs procedures under the CCC such as transit, storage and processing. Pursuant to the UCC, “customs procedure” was defined in Article 5 as release for free circulation, special procedures and export.

Article 211 UCC made general provisions in relation to authorisations for all special procedures. It is common ground that Article 211 UCC governed the appellant’s application for authorisation and set out the relevant conditions for an authorisation to have retroactive effect. Article 211(1) provides that an authorisation is required for various special procedures including the end-use procedure. It provides that the conditions under which use of the procedure is permitted shall be set out in the authorisation.

Article 211(2) provides that customs authorities shall grant an authorisation with retroactive effect where all of the conditions set out therein are fulfilled. Those conditions include:

Article 211(3) provides that authorisation shall only be granted to persons satisfying certain conditions. Article 211(3)(c) provides that an authorisation shall only be granted where a customs debt may be incurred for goods placed under the special procedure if they provide a guarantee in accordance with Article 89. Article 89 contains general provisions for guarantees in relation to potential or existing customs debts.

Chapter 4 UCC deals with “specific use”, and Section 2 deals with end-use. Article 254(4)(a) provides that customs supervision under the end-use procedure shall end in various situations, including where the goods have been used for the purposes laid down for the application of the duty exemption - in other words, where they have been put to the end-use which has been authorised.

Article 172 UCC DA makes provision for when an authorisation granted with retroactive effect pursuant to Article 211(2) UCC shall take effect. Article 172(1) provides such authorisations shall take effect at the earliest on the date of acceptance of the application. Article 172(2) provides that in exceptional circumstances the customs authorities may allow an authorisation to take effect at the earliest one year before the date of acceptance of the application. Article 172(3) provides that if an application concerns “renewal of an authorisation for the same kind of operation and goods”, the authorisation may be granted with retroactive effect from the date on which the original authorisation expired.

Recital (56) of the UCC DA states that in order to ensure the continued validity of authorisations granted under the CCC, it is necessary to establish transitional provisions “to allow for the adaptation of those … authorisations to the new legal rules”. The transitional provisions are in Title IX UCC DA. Article 250 makes provision for the re-assessment of CCC authorisations already in force on 1 May 2016 which were not time limited. Article 251 provides for CCC authorisations in force on 1 May 2016 to remain valid. Where an authorisation was time limited, it was valid until the end of that time period or 1 May 2019, whichever is the earlier. Where an authorisation was not time limited it remained valid until reassessed in accordance with Article 250.

Article 254 provides that where a CCC authorisation remains valid by virtue of Article 251, the conditions under which the authorisation is applied shall be those laid down in the corresponding provisions of the UCC, the UCC DA and Commission Implementing Regulation 2015/2447. It was not suggested that the latter regulation was relevant for present purposes. Annex 90 of the UCC DA sets out provisions under the CCC and the corresponding provisions under the UCC.