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J3: Appealing other indirect tax decisions
Start of time limits: date of document or date of notification?
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See J2: Challenging direct tax decisions
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Relevant decisions
"(1) This section applies for the purposes of the following provisions of this Chapter.
(2) A reference to a relevant decision is a reference to any of the following decisions—
Customs duty/agricultural levy
(a) any decision by HMRC, in relation to any customs duty or to any agricultural levy of the European Union, as to—
(i) whether or not, and at what time, anything is charged in any case with any such duty or levy;
(ii) the rate at which any such duty or levy is charged in any case, or the amount charged;
(iii) the person liable in any case to pay any amount charged, or the amount of his liability; or
(iv) whether or not any person is entitled in any case to relief or to any repayment, remission or drawback of any such duty or levy, or the amount of the relief, repayment, remission or drawback to which any person is entitled;
Excise duty assessments
(b) so much of any decision by HMRC that a person is liable to any duty of excise, or as to the amount of his liability, as is contained in any assessment under section 12 above;
(c) any decision by HMRC to assess any person to excise duty under section 12A(2) above, section 61, 94, 96 or 167 of the Management Act, section 8, 10, 11 or 36G of the Alcoholic Liquor Duties Act 1979, section 10, 13, 13ZB, 13AB, 13AD, 14, 14F, 23 or 24 of the Hydrocarbon Oil Duties Act 1979,section 8 of the Tobacco Products Duty Act 1979, section 2 of the Finance (No 2) Act 1992 or as to the amount of duty to which a person is to be assessed under any of those provisions;
Repayment and drawback of excise duty
(d) any decision by HMRC on a claim under section 137A of the Management Act for repayment of excise duty;
(e) any decision by HMRC as to whether or not any person is entitled to any drawback of excise duty by virtue of regulations under section 2 of the Finance (No 2) Act 1992, or the amount of the drawback to which any person is so entitled;
(f) any decision by HMRC as to whether or not any person is entitled to any repayment or credit by virtue of regulations under paragraph 4(2)(h) of Schedule 2A to the Alcoholic Liquor Duties Act 1979 (duty stamps), or the amount of the repayment or credit to which any person is so entitled;
Forfeit of of security
(g) any decision by HMRC made by virtue of regulations under paragraph 4(2)(i) of that Schedule that some or all of a payment made, or security provided, is forfeit, or the amount which is so forfeit;
(ga) …
Penalties
(gb) any decision by HMRC that a person is liable to a penalty, or as to the amount of the person's liability, under section 8O of the Tobacco Products Duty Act 1979;
(gc) any decision by HMRC that a person is liable to a penalty, or as to the amount of a person's liability, under—
(i) regulations under section 55 of the Finance (No. 2) Act 2017, or
(ii) Schedule 13 to that Act;
(h) so much of any decision by HMRC that a person is liable to any penalty under any of the provisions of this Chapter, or as to the amount of his liability, as is contained in any assessment under section 13 above;
Interest
(i) any decision as to whether or not—
(i) an amount due in respect of customs duty or agricultural levy, or
(ii) any repayment by HMRC of an amount paid by way of customs duty or agricultural levy,
is to carry interest, or as to the rate at which, or period for which, any such amount is to carry interest;
Schedule 5 decisions
(j) any decision by HMRC which is of a description specified in Schedule 5 to this Act, except for any decision under section 152(b) of the Management Act as to whether or not anything forfeited or seized under the customs and excise Acts is to be restored to any person or as to the conditions subject to which any such thing is so restored." (FA 1994, s.13A)
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Schedule 5
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EU Customs decisions and import duty guarantees
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"(1) The decisions listed in paragraph (2) are to be treated as if they were listed in Schedule 5 to the Finance Act 1994 (decisions subject to review and appeal).
(2) The decisions referred to in paragraph (1) are—
(a) any decision made under EU Customs legislation—
(i) which corresponds to the description of a decision in paragraph 1(aa) to (e), (h) or (i) of Schedule 5 to the Finance Act 1994;
(ii) in relation to any goods, as to whether or not the entry, unloading, transhipment or transit of the goods, or their release by or to any person or for any purpose, is to be allowed or otherwise permitted;
(iii) as to whether or not, in any particular case, a fee is to be charged to any person or as to the amount of any such fee;
(iv) in relation to a decision falling within paragraphs (i) to (iii) of this sub-paragraph, as to the conditions subject to which that decision is made or, as the case may be, the matters to which that decision relates have effect;
(v) as to the time at which, or the period within which, any obligation to do anything required or authorised by EU Customs legislation is to be complied with; or
(vi) as to whether or not a decision falling within paragraphs (i) to (v) of this sub-paragraph is to be varied, suspended or revoked, including a decision as to whether or not the time at which any such decision is to take effect is to be deferred, and a decision as to whether or not a licence, authorisation or approval is to be suspended or revoked or the terms of a licence, authorisation or approval are to be varied;
(b) any decision, so far as it is made under any provision made by or under the Taxation (Cross-border Trade) Act 2018, as to whether or not any person is to be required to give any guarantee for the fulfilment, in whole or in part, of any obligation to pay any import duty and excise duty, or as to the form, amount or conditions of any such guarantee.
(3) In this regulation—
“EUCL” means the direct EU legislation referred to in paragraph 1(1) of Schedule 7 to the Taxation (Cross-border Trade) Act 2018;
“EU Customs Code” has the same meaning as it has in regulation 6;
“EU Customs legislation” means—
(a) the EU Customs Code as it had effect before IP completion day except the EUCL; and
(b) after IP completion day, the EU Customs Code except the EUCL." (SI 2019/1215 r.7)
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HMRC must offer a review of a relevant decision
"(1) If HMRC notify a person (P) of a relevant decision by HMRC, HMRC must at the same time, by notice to P, offer P a review of the decision.
(2) This section does not apply to the notification of the conclusions of a review." (FA 1994, s.15A)
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Right to require review within 30 days
"(1) Any person (other than P) who has the right of appeal under section 16 against a relevant decision may require HMRC to review that decision.
(2) The other person may not notify HMRC requiring a review of the decision if either of the following conditions is met.
(3) Condition A is that—
(a) the relevant decision falls within section 14(1)(b) (decision linked to decision under section 152(b) of the Management Act about things forfeited or seized), and
(b) under section 15, HMRC are reviewing, or have reviewed, the decision under section 152(b) of the Management Act to which the relevant decision is linked.
(4) Condition B is that P or the other person has brought an appeal under section 16 with respect to the relevant decision." (FA 1994, s.15B)
30 day time limit
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"(5) A notification that such a person requires a review must be made within 30 days of that person becoming aware of the decision." (FA 1994, s.15B)
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HMRC obligation to carry out review if accepted in time
"(1) HMRC must review a decision if—
(a) they have offered a review of the decision under section 15A, and
(b) P notifies HMRC of acceptance of the offer within 30 days beginning with the date of the document containing the notification of the offer of the review.
(2) P may not notify HMRC of acceptance of the offer of review if either of the following conditions is met.
(3) Condition A is that—
(a) the relevant decision falls within section 14(1)(b) (decision linked to decision under section 152(b) of the Management Act about things forfeited or seized), and
(b) under section 15, HMRC are reviewing, or have reviewed, the decision under section 152(b) of the Management Act to which the relevant decision is linked.
(4) Condition B is that P has brought an appeal under section 16 with respect to the relevant decision.
(5) HMRC must review a decision if a person other than P notifies them under section 15B.
(6) HMRC shall not review a decision if P, or another person, has appealed to the appeal tribunal under section 16 in respect of the decision." (FA 1994, s.15C)
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- Extension of time
"(1) If under section 15A, HMRC have offered P a review of a decision, HMRC may within the relevant period notify P that the relevant period is extended.
(2) If under section 15B another person may require HMRC to review a matter, HMRC may within the relevant period notify the other person that the relevant period is extended.
(3) If notice is given the relevant period is extended to the end of 30 days from—
(a) the date of the notice, or
(b) any other date set out in the notice or a further notice." (FA 1994, s.15D)
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Relevant period
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"(4) In this section “relevant period” means—
(a) the period of 30 days referred to in—
(i) section 15C(1)(b) (in a case falling within subsection (1)), or
(ii) section 15B(5) (in a case falling within subsection (2)), or
(b) if notice has been given under subsection (1) or (2), that period as extended (or as most recently extended) in accordance with subsection (3)." (FA 1994, s.15D)
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- Review out of time if reasonable excuse
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"(1) This section applies if—
(a) HMRC have offered a review of a decision under section 15A and P does not accept the offer within the time allowed under section 15C(1) or 15D(1); or
(b) a person who requires a review under section 15B does not notify HMRC within the time allowed under that section or section 15D(3).
(2) HMRC must review the decision if—
(a) after the time allowed, P, or the other person, notifies HMRC in writing requesting a review out of time,
(b) HMRC are satisfied that P, or the other person, had a reasonable excuse for not accepting the offer or requiring review within the time allowed, and
(c) HMRC are satisfied that P, or the other person, made the request without unreasonable delay after the excuse had ceased to apply.
(3) HMRC shall not be required to review a decision under this section if Condition A is met (see sections 15B(3) and 15C(3)).
(4) HMRC shall not review a decision if P, or another person, has appealed to the appeal tribunal under section 16 in respect of the decision." (FA 1994, s.15E)
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- Nature of review
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"(1) This section applies if HMRC are required to undertake a review under section 15C or 15E.
(2) The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances.
(3) For the purposes of subsection (2) HMRC must, in particular, have regard to steps taken before the beginning of the review—
(a by HMRC in making the decision, and
(b) by any person who is seeking to resolve disagreement about the decision.
(4) The review must take account of any representations made by P, or the other person, at a stage which gives HMRC a reasonable opportunity to consider them.
(5) The review may conclude that the decision is to be—
(a) upheld,
(b) varied, or
(c) cancelled." (FA 1994, s.15E)
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- 45 day time limit for review
"(6) HMRC must give P, or the other person, notice of the conclusions of the review and their reasoning within—
(a) the period of 45 days beginning with the relevant date, or
(b) such other period as HMRC and P, or the other person, may agree.
(7) In subsection (6) “relevant date” means—
(a) the date HMRC received P's notification accepting the offer of a review (in a case falling within section 15A),
(b) the date HMRC received notification from another person requiring review (in a case falling within section 15B), or
(c) the date on which HMRC decided to undertake the review (in a case falling within section 15E).
(8) Where HMRC are required to undertake a review but do not give notice of the conclusions within the time period specified in subsection (6), the review is to be treated as having concluded that the decision is upheld.
(9) If subsection (8) applies, HMRC must notify P or the other person of the conclusion which the review is treated as having reached." (FA 1994, s.15E)
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Seizure challenges: no appeal without review
“Mr Hays is plainly correct to say that, without a review under 15 FA 1994 in a case such as this, there can be no appeal to the Tribunal. That can be seen by considering the rights of appeal to the Tribunal set out in s16 of FA 1994. The only right of appeal that s16 confers which is not linked to a decision on review is that set out in s16(1B) of FA 1994 which envisages that an appeal can be made against a “relevant decision”. However, a decision to refuse to restore goods under s152(b) of CEMA is not within the scope of the definition of “relevant decision” set out in s13A(a) to (i) of FA 1994, and is expressly excluded from the scope of s13A(j) of FA 1994.” (Ecoadana SRO v. HMRC [2016] UKFTT 109 (TC), §28).
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Appeal to Tribunal against relevant decision
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No review requested
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(1B) Subject to subsections (1C) to (1E), an appeal against a relevant decision (other than any relevant decision falling within subsection (1) or (1A)) may be made to an appeal tribunal within the period of 30 days beginning with—
(a) in a case where P is the appellant, the date of the document notifying P of the decision to which the appeal relates, or
(b) in a case where a person other than P is the appellant, the date the other person becomes aware of the decision, or
(c) if later, the end of the relevant period (within the meaning of section 15D)." (FA 1994, s.16)
Review required
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"(1C) In a case where HMRC are required to undertake a review under section 15C—
(a) an appeal may not be made until the conclusion date, and
(b) any appeal is to be made within the period of 30 days beginning with the conclusion date." (FA 1994, s.16)
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Conclusion date
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(1G) In this section “conclusion date” means the date of the document notifying the conclusion of the review.
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Review requested out of time
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"(1D) In a case where HMRC are requested to undertake a review in accordance with section 15E—
(a) an appeal may not be made to an appeal tribunal—
(i) unless HMRC have notified P, or the other person, as to whether or not a review will be undertaken, and
(ii) if HMRC have notified P, or the other person, that a review will be undertaken, until the conclusion date;
(b) any appeal where paragraph (a)(ii) applies is to be made within the period of 30 days beginning with the conclusion date;
(c) if HMRC have notified P, or the other person, that a review will not be undertaken, an appeal may be made only if the appeal tribunal gives permission to do so." (FA 1994, s.16)
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Deemed review outcome
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"(1E) In a case where section 15F(8) applies, a notice of appeal may be made at any time from the end of the period specified in section 15F(6) to the date 30 days after the conclusion date." (FA 1994, s.16)
Out of time appeal
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"(1F) An appeal may be made after the end of the period specified in subsection (1), (1A), (1B), (1C)(b), (1D)(b) or (1E) if the appeal tribunal gives permission to do so." (FA 1994, s.16)
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- Identity of appellant
"(2A) An appeal under this section with respect to a relevant decision (other than any relevant decision falling within subsection (1) or (1A)) shall not be entertained unless the appellant is—
(a) a person whose liability to pay any relevant duty or penalty is determined by, results from or is or will be affected by the relevant decision,
(b) a person in relation to whom, or on whose application, the relevant decision has been made, or
(c) a person on whom the conditions, limitations, restrictions, prohibitions or other requirements to which the relevant decision relates are or are to be imposed or applied." (FA 1994, s.16)
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Powers on appeal
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- Ancillary matter decision: supervisory
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"(4) In relation to any decision as to an ancillary matter, or any decision on the review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the Commissioners or other person making that decision could not reasonably have arrived at it, to do one or more of the following, that is to say—
(a) to direct that the decision, so far as it remains in force, is to cease to have effect from such time as the tribunal may direct;
(b) to require the Commissioners to conduct, in accordance with the directions of the tribunal, [a review or further review as appropriate] of the original decision; and
(c) in the case of a decision which has already been acted on or taken effect and cannot be remedied by [a review or further review as appropriate], to declare the decision to have been unreasonable and to give directions to the Commissioners as to the steps to be taken for securing that repetitions of the unreasonableness do not occur when comparable circumstances arise in future." (FA 1994, s.16)
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- Meaning of ancillary matter
"(8) Subject to subsection (9) below references in this section to a decision as to an ancillary matter are references to any decision of a description specified in Schedule 5 to this Act which is not comprised in a decision falling within section 13A(2)(a) to (h) above.
(9) References in this section to a decision as to an ancillary matter do not include a reference to a decision of a description specified in [the following paragraphs of Schedule 5—
(a paragraph 3(4);
(b) paragraph 4(3);
(c) paragraph 9(e);
(d) paragraph 9A." (FA 1994, s.16)
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- Other appeals
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"(5) In relation to other decisions, the powers of an appeal tribunal on an appeal under this section shall also include power to quash or vary any decision and power to substitute their own decision for any decision quashed on appeal." (FA 1994, s.16)
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- Supervisory jurisdiction on non-ancillary matter appeals
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"[149] We note, in accordance with regulation 7(1) EGDR, drawback claims are subject to conditions imposed by EGDR and by notice published by HMRC but in each and every case those conditions apply “unless [HMRC] otherwise allow”. There is therefore an inherent discretion as to the circumstances in which drawback will be permitted so as to achieve the collection of excise duty by reference to where excise goods are consumed.
[150] We then turn to consider the provisions of section 16(5) FA94. It is a trite tenet of statutory construction that the language adopted by Parliament has been chosen for a reason and should be given meaning. The powers in section 16(5) FA94 “shall also include” the powers so stated. In our view it is plain that the provisions of section 16(5) FA94 are not standalone provisions, they are accretive or additional to something. It is, in our view, plain that they are additional to the powers in section 16(4) FA04. Those are the only powers mentioned in section 16. The provisions of section 16(4)(a) - (c) FA94 are expressed to be powers granted to the Tribunal in the context of management decisions requiring HMRC to exercise their discretion. The Tribunal’s jurisdiction in respect of administrative/management decisions is confined to the supervisory powers identified in section 16(4) FA94 and the Tribunal “also” has a full appellate jurisdiction in respect of other decisions.
[151] Of course, it will not always be necessary or appropriate to exercise a supervisory jurisdiction on an appeal against an “other decision”. Where there is no discretion exercised by HMRC and/or no management decision there is unlikely to a basis for reviewing the process and basis on which HMRC have reached a decision. But, as here, where the source of HMRC’s power to determine whether a claim is payable is subject to conditions “save as [HMRC] may otherwise allow” we consider that the statutory framework is clear. We have a jurisdiction to consider the reasonableness of HMRC’s decision and, where unreasonable, to require them to re-review the original decision with directions on that re-review.
[152] In our view, properly interpreted section 16(5) FA94 permits us to evaluate not only whether the Appellant has met the conditions imposed by EGDR and/or the additional conditions imposed in EN 207 by way of our appellate jurisdiction, we are also entitled to evaluate whether the decision whether or not to exercise their discretion to “otherwise allow” claims which do not meet the prescribed conditions has been exercised reasonably." (Drinks and Food UK Limited v. HMRC [2023] UKFTT 979 (TC), Judge Amanda Brown KC)
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- Penalty mitigation
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"(7) An appeal tribunal shall not, by virtue of anything contained in this section, have any power, apart from their power in pursuance of section 8(4) above, to mitigate the amount of any penalty imposed under this Chapter. (FA 1994, s.16)
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- Interest appeal
(10) Nothing in this section shall be taken to confer on an appeal tribunal any power to vary an amount of interest specified in an assessment under paragraph 11A of Schedule 6 to this Act except in so far as it is necessary to reduce it to the amount which is appropriate under paragraph 7 of that Schedule."(FA 1994, s.16)
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Customs duties decisions: right of appeal
“(1) Any person shall have the right to appeal against decisions taken by the customs authorities which relate to the application of customs legislation, and which concern him directly and individually.
The appeal must be lodged in the Member State where the decision has been taken or applied for.
(2) The right of appeal may be exercised:
(a) initially, before the customs authorities designated for that purpose by the Member States;
(b) subsequently, before an independent body, which may be a judicial authority or an equivalent specialized body, according to the provisions in force in the Member States.” (CCC, Article 243)
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“The right is to a two stage appeal. It is not in our view arguable that paragraphs (a) and (b) in art 243.2 are alternatives, as they are expressed as being an initial and a subsequent right, although there is nothing to prevent a person dispensing with the initial stage and going straight to the independent body. The word “may” is used because it is not mandatory for anyone affected to exercise their rights if they do not wish to for whatever reason, but that choice can only be made by a person who has received the communication and been made aware of their rights.” (Sharya UK Ltd v. HMRC [2018] UKFTT 72 (TC), §78, Judge Richard Thomas).
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Query whether HMRC have power to reduce assessment outside of statutory review process​
"[54] We consider that it is clear that the reduction made to the penalty as a result of the review falls within the Respondents' powers under the legislation because:
(1) paragraph 16(3) of Schedule 41 provides that an assessment to a wrongdoing penalty is to be treated for procedural purposes in the same way as an assessment to tax; and
(2) the provisions dealing with assessments to excise duties in the Finance Act 1994 (the "FA 1994") empower the Respondents to vary an assessment on review - see Section 15F(5) of the FA 1994.
[55] It is less clear that the Respondents are empowered by the legislation to reduce an assessment to a wrongdoing penalty after the review has been concluded and the Appellant has notified its appeal against the review conclusion to the FTT. The Respondents submit that Section 12(3) of the FA 1994 is authority for that proposition because it stipulates that an amount assessed as due and notified under Section 12 of the FA 1994 shall, subject to any appeal, be deemed to be the amount of the duty due and may be recovered accordingly "unless, or except to the extent that, the assessment has subsequently been withdrawn or reduced". The Respondents say that the reference in that section to a reduced assessment means that the Respondents may reduce the assessment at any time. That may be so but it is not entirely clear to us that a mere reference in the legislation to a reduced assessment as an exception to the rule that the amount shown in the original assessment is to be deemed to be the amount due is sufficient to empower the Respondents to reduce an assessment at any time without express authority to do so in the legislation. We would have expected a power of that nature to have been set out expressly in the legislation. As it stands, the reference in that section to a reduced assessment seems more likely to us to be referring to the power of the Respondents to reduce the amount assessed on review pursuant to Section 15F(5) of the FA 1994, as mentioned in paragraph 54 above. However, this question is of little moment in the present context because, even if we are confined in this decision to considering the penalty following its reduction on review and not the penalty as subsequently reduced on 24 January 2024, we consider that, for the reasons set out in paragraphs 68 to 71 below, we are entitled by paragraph 19 of Schedule 41 to substitute for the Respondents' decision another decision which the Respondents had the power to make. Accordingly, we can consider the penalty position ab initio for ourselves." (Kent Couriers Limited v. HMRC [2024] UKFTT 145 (TC), Judge Beare)