[2025] UKUT 00315 (TCC)

The letter was sent under a covering email which stated:

The FTT then decided at [27]-[30] that HMRC’s email dated 27 December 2019 assured the Appellant they had agreed to waive the three-year time limit in Reg. 7(6):

“27.

Mr Thornton considered that the email of 27 December 2019 amounted to a waiver of the time limit condition in regulation 7(6) EGDR. Before us HMRC contended that it was not a waiver and that the time limit condition would be waived only were the Appellant to meet the other conditions for drawback.

28.

There is a degree to which the difference between the parties in this regard is semantic as, in order for there to be a valid claim for drawback, the EGDR conditions (including those prescribed in a notice) must be complied with unless “otherwise allowed” by HMRC even if the time limit has been waived.

29.

We did not have the benefit of any evidence from the author of the 27 December 2019 email but, in any event, we considered whether there was or was not a waiver of the time limit as a matter of construction of the email in context.

30.

In that regard, and as communicated during the hearing, we consider that the only reasonable construction of the 27 December 2019 email is that there was a waiver of the regulation 7(6) time limit i.e. that HMRC would not refuse an otherwise compliant claim solely on the basis that it had been made outside the three-year time limit. We reach this view for the following reasons:

(1)

Without waiver of the time limit there was no basis for a drawback claim at all as the excise duty which was the subject of the claim had been paid more than three years prior to the export event giving rise to a potential drawback claim.

(2)

Mr Thornton’s letter was clear that in order to begin the process of formulating and making the claim a waiver of the time limit was required.

(3)

Full facts were explained to justify a waiver. The letter was clear that it was focused only on a request for waiver of the time limit. Mr Thornton considered, at that time, that all other conditions would be met at the point a claim was submitted.

(4)

HMRC’s response said the relevant decision maker “can consider a drawback

claim even though the condition stated in [EGDR] regulation (6) … has not been met”.

(5)

In light of Mr Thornton’s indication that he was not seeking waiver of any other condition HMRC reiterated that the claim must otherwise meet the conditions and requirements for drawback.”

The FTT relied on its conclusion at [30] that “HMRC would not refuse an otherwise compliant claim solely on the basis” of the time limit to allow the appeal in part in respect of duty on goods where the other drawback conditions were satisfied at [71]- [74]:

“71.

There can be no question that the three-year time limit is a condition which restricts the right of a claimant unless waived by HMRC.

72.

However, as set out in paragraph 30. we have found that there was a waiver of the time limit condition.

73.

We consider that it is plain from the terms of EN 207 (in both versions) that HMRC have the power to reject or reduce a claim. The power to reduce a claim arises, as set out in EN 207 where “… the conditions and requirements of this notice and EGDR for some, and not all, of the goods declared on the NOI and drawback claim form”. Where the conditions and requirements are all met for part of the claim HMRC indicate that the compliant part of the claim will be met. To do so, in our view, meets the UK’s obligations under Article 33(6) Council Directive 2008/118/EC.

74.

Accordingly, we find that the Appellant’s drawback claim was valid as regards £9,695.27 and HMRC were wrong to reject that part of the claim. We therefore allow the appeal in respect of this sum.”

The FTT also concluded that HMRC had acted unreasonably in relying on the failure to comply with the three-year time limit when refusing the drawback claim in its entirety because the conditions had otherwise been complied with in relation to part of the claim. The FTT held at [154]-[157]:

“155.

The Appellant contends that the claim was refused because HMRC considered the event giving rise to the Claim occurred more than three years after the date of payment of the relevant duty. It contends, in view of the terms of the email dated 27 December 2019, it was unreasonable to reject the claim on that basis.

156.

HMRC contend that the claim was rejected because various conditions had not been met and that the terms of the 27 December 2019 email required those conditions to be met before the time limit would be waived.

157.

On the basis that we have found that there was a waiver of the time limit condition we consider that rejection of the claim in its entirety is unreasonable. Exercising our full appellate jurisdiction we have already allowed the appeal in respect of those parts of the claim which are unaffected by the Appellant’s failure to ensure that the duty stamps were obliterated in accordance with the DSR and the failure to provide evidence of export.”