[2025] UKUT 00315 (TCC)

The supporting evidence you need to submit with your drawback claim form

HMRC’s review decision dated 24 November 2021 relied on the Appellant’s failure to provide proof that it had exported the goods in respect of which it sought the drawback of excise duty as follows:

“The goods were exported

The S8 print out is a specific report generated by the CHIEF system, when a declaration has

been finalised at departure, Mr Thornton has argued that these print outs are no longer produced and therefore their custom agent cannot be provided it. This is not strictly true, Mr Thornton is correct that the production of the form is no longer available at non-inventory linked ports, as these ports do not use the CHIEF system.

The S8 print out is required as evidence in drawback claims and when this form is unavailable an exporter can obtain confirmation the goods have been departed via one of the following options;

• a Community System Provider link

• a local loader badge for direct access to CHIEF

• form C1602 submitted to the NCH (National Customs Hub detailed above.

Therefore, I do not accept Mr Thornton's argument that the form is no longer available. As an experienced agent, I share Officer O'Rourke's view that Mr Thornton would have had some awareness of the ongoing situation regarding the S8 print outs and the appropriate workarounds in place for exporters.

Alternatively, the company could have exported the goods via an inventory port and obtained a copy of the S8 from CHIEF, thus eliminating any problems in acquiring the necessary documentation.”

The FTT made the following findings of fact regarding the Appellant’s provision of export evidence at [48]-[53]:

“48.

Also provided were the relevant tracing documents. For the shipments made in December 2020 SAADs were also provided. Those SAADs included the 112 cases of Vodka which were shipped but not included in the NOI or subsequent claim. For the April 2021 shipment T1 (Transit Accompanying Documentation) was provided.

The FTT concluded at [130]-[132] that the Appellant had breached the condition imposed by paragraph 7.4 EN207 in relation to producing evidence of export:

“130.

HMRC contend that the Appellant failed to provide a CHIEF S8 with a departed status of 60 or any of the alternative forms of documentation considered to be acceptable evidence of movement in breach of the condition contained in paragraph 7.4 EN 207 in respect of the goods exported on 8April 2021.

131.

The Appellant does not deny that the requirements of paragraph 7.4 are a condition of drawback, and the Appellant accepts that it was in breach of this condition because it did not provide either a CHIEF S8 showing a departed status of 60 or the CDS equivalent but contends that the requirements specified in paragraph 7.4 were impossible to comply with as from 1 January 2021 the ferry ports no longer operated CHIEF.

132.

In view of this concession we find that the Appellant failed to meet the condition requiring export evidence. We consider the implications of the breach below.”

At [167]-[174] the FTT considered whether it was reasonable for HMRC to refuse the drawback claim based upon the lack of export evidence.

The FTT explained the background to and effect of HMRC’s original and review decisions in relation to the Appellant’s lack of evidence of export of the goods providing a reason for refusing the drawback claim at [167]-[170] of the Decision:

“167.

As indicated above, regulation 8(2)(b) EGDR authorises HMRC to specify in a notice the documents required to evidence export. EN 207 (in both the 2019 and 2021 versions) specified that a CHIEF S8 showing a departed status of 60 or the CDS equivalent be provided.

168.

On 13 May 2021 when providing supporting evidence to the claim the Appellant included the export documentation endorsed by the Netherlands customs authorities confirming payment of duty in The Netherlands. By that letter the Appellant informed HMRC that an S8 could not have been obtained in circumstances in which the movement was by lorry on a roll-on-roll-off ferry. A copy of a Q&A forum on gov.uk was provided substantiating that the S8 could not have been obtained.

169.

The Original Decision to refuse the claim acknowledges that the Appellant had indicated that it had been unable to obtain a CHIEF S8 and that the gov.uk forum indicated there was an issue but nevertheless refused the claim for failure to produce the S8.

170.

The Review reiterates that no S8 was provided and accordingly, the Claim failed to meet the condition in paragraph 7.4. It goes on to indicate that an S8 could have been obtained by exporting via an inventory port or through the production of alternative acceptable documentation confirming departure by way of: 1) a community system provider link, 2) a local loader badge for direct access to CHIEF, or 3) a form C1602 submitted to the National Customs Hub. None of these means were open to the Appellant after export.”

It concluded with reluctance at [171]-[174] that it was reasonable for HMRC to refuse the drawback claim based upon the lack of required export evidence:

“171.

In cross examination of Mr Thornton HMRC sought to establish that the failure to obtain a CHIEF S8 was a failing of his, that he had not sufficiently researched how the necessary evidence could have been obtained, principally through use of a method of movement other than the one selected. Mr Thornton openly accepted that he had been unaware that S8s were not issued post 31 December 2020 in respect of roll-on-roll-off ferry movements but pointed out that there had been no publicity of, or change in the guidance regarding, the impending change and that it had taken many by surprise. He referenced communications he had had with freight forwarders and customs agents which demonstrated that it was a problem for many.

172.

We have great sympathy for the Appellant in this regard. To have adopted an alternative method of export without warning or notice that they needed to do so in order to be able to claim drawback is harsh.

173.

However, having reviewed the evidence, it is clear that HMRC considered the material provided by the Appellant as to the difficulties faced by exporters using roll-on-roll-off ferries. Had they failed to do so entirely then we could have required a re-review and a direction that they consider it. However, they have not failed to take account of a relevant factor, nor have they taken account of an irrelevant factor. They have considered whether the Appellant was able to offer alternative evidence of export and rejected such evidence as was produced on the grounds that it was commercial documentation and not official evidence. In doing so they have adopted a hard line that results in an outcome with which we disagree, but we are unable to conclude it was outside the bounds of reasonable. It is not therefore a decision which it is open to us to call them to re-review.

174.

Accordingly, we refuse the appeal in this regard.”

Mr Thornton submitted that this ground related to the requirement for the provision of a document known as an S8 showing status 60 as part of the proof of export when making a claim for drawback.

By way of background, he suggested that this document is produced by HMRC’s systems CHIEF. Prior to the end of the Brexit transitional or implementation period on 31 December 2020, it was a document only produced for movements that went to third countries (those outside the EU). The S8 document showing status 60 was the document which formed prima facie proof that the goods in question had been exported. Dispatches to EU member states took place under cover of a Simplified Administrative Accompanying Document (“SAAD”) instead. However, Roll on Roll Off (“RoRo”) transport generally, if not universally, went to EU member states.

It was not widely known by the industry that HMRC had opted not to generate the S8 document, instead having an internally recorded deemed export for any goods that were marked as using RoRo shipping. Mr Thornton clarified, for the avoidance of doubt, that the UK’s systems have since changed and they are not using CHIEF for exports at all. The S8 document showing status 60 is no longer required for any exports.

Mr Thornton addressed the FTT’s finding at [131]-[132] of the Decision that recorded DFUK had conceded that there was a valid condition at para 7.4 of EN 207 to obtain and produce an S8 on export of drawback goods even when using RoRo for the export. As the FTT considered the Appellant made that concession, it simply found that there was a breach of the condition and moved on to whether it should be considered to have been waived.

He argued that this ground of appeal must succeed as there was no such concession made by the Appellant, therefore the FTT’s finding is wrong in law. The purported concession was recorded in the Judge’s notes at and reads as follows: “Primary submission for such movement it was an ultra vires condition or didn’t apply to movements of that kind”.

Mr Thornton contended that it was trite law that an ultra vires condition is void. It cannot be considered a valid, binding condition that requires any waiver because it does not apply so cannot be waived. This is wholly consistent with the Appellant’s alternative argument that if it is a binding condition per se it is simply one that had no application to the movement at hand. If it did not apply to RoRo movements, then there was no non-compliance with a condition that otherwise needed to be waived by HMRC.

He submitted that, for the avoidance of doubt, DFUK’s position was clearly a challenge to the validity of the condition as set out in [58]-[60] of its skeleton argument. Only at [61] of the skeleton was the alternative argument raised that it would be conspicuously unfair not to have waived the condition if DFUK was wrong as to its validity. He accepted that the March 2021 version of EN 207 does contain the proviso that para 7.4 has force of law, but that alone does not prevent the condition being void or found not to apply to RoRo exports at this time.

Mr Thornton recommend the approach of the FTT in the decisions of Global Foods Ltd & Others v HMRC [2014] UKFTT 1112 (TC) (“Global Foods”) and of Centrax Ltd v Customs and Excise Comrs (1998) VAT Decision 15743 which it followed. In Global Foods, the FTT were considering a VAT public notice which expressly stated that it had force of law (see [24]). This related to the need to obtain and show on a VAT invoice one’s customer’s VAT number in another EC member state in order to zero-rate a cross-border supply. The issue had arisen that where a taxable person moved their own goods to another member state, it was a deemed supply and as such there was no invoice issued to a customer that could state the VAT number in the member state of receipt.

At [51] of Global Foods the FTT considered the application of EU jurisprudence to the effect that VAT zero-rating was available even if not all domestic requirements for it were met so long as the taxpayer had shown they had done all that was reasonably required to provide information that showed the point in question. However, at [52] the FTT considered that approach was not necessary. Instead, they could construe the elements of the condition that did not apply to the taxable supplies in question to be irrelevant to them.

Mr Thornton submitted that the same approach would apply to this appeal. Where transport via RoRo does not cause the specified document to be generated, its production cannot be a part of the condition as it applies to that form of movement, even if it applies to other forms of movement.

If this is incorrect, then the routine non-generation of the S8 document in question by HMRC when RoRo transport is used prima facie renders that document at least excessively difficult to obtain and provide back to HMRC when making a drawback claim.