Notice

Notice 266: rejected imports - repayment or remission of duty and vat

Updated 28 April 2016

This notice was withdrawn on 3 May 2016

Notice 266 withdrawn and replaced by the detailed guide Refunds and waivers on customs debt.

This information is obsolete. Please read Refunds and waivers on customs debt for further information.

Foreword

This notice cancels and replaces Notice 266 (August 2004). Details of any changes to the previous version can be found in paragraph 1.2 of this notice.

1. About the notice, the law and your rights

1.1 What is this notice about?

It tells you how to claim repayment or remission of Import Duty, Excise Duty and VAT on goods imported into the UK which you reject because they:

• are defective
• do not comply with the terms of the contract
• were damaged before being cleared by Customs

It also tells you how to claim repayment or remission of Import Duty and VAT on imported goods which are in any of the special situations described in section 3, for example addressed to you in error, or received by you after a fixed delivery date.

It covers imports from:

• outside the EC
• countries having a Customs Union with the EC
• the ‘Special Territories’

For mail order goods which you return to the supplier, the procedures are different and you should read our Notice 199: imported goods: customs procedures and customs debt.

If you wish to claim repayment of Excise Duty on goods brought from another member state, please read our Notice 207 Excise Duty: drawback.

The glossary at section 6 explains the meaning of some of the particular words, phrases and abbreviations used.

1.2 Changes from the earlier version of this notice

The changes to the August 2004 edition of this notice have been included in this version.

Paragraph 1.4 has been added explaining the new process when receiving an adverse customs decision.

Paragraph 1.5 has been re-numbered (from 1.4) to accommodate the addition of paragraph 1.4.

Paragraph 2.8 has been revised to clarify the process for reclaiming VAT.

Paragraph 5.1 has been revised to cover details of the office to which claims from companies are to be sent.

Paragraph 5.10 has been retitled.

You can access details of any changes to this notice since August 2004 either on our website at www.hmrc.gov.uk or by phoning the VAT, Excise and Customs Helpline on Telephone: 0300 200 3700.

This notice and others mentioned are available both on paper and on our internet website.

1.3 What law covers this notice?

The law on which this notice is based is:

• the Community Customs Code (Council Regulation EEC No 2913/92), articles 235 to 242 as implemented by Commission Regulation (EEC) No. 2454/93, part IV, title IV (for import duty)
• the Customs and Excise Management Act 1979, section 123 (for Excise Duty)
• the VAT Act 1994, section 16(1) (for VAT)

This notice explains our view of the law.

1.4 What rights do I have in relation to a Customs decision?

Receiving an adverse Customs decision from HM Revenue and Customs (HMRC) - Right to be Heard

When you receive an adverse customs decision from HMRC you will first be issued with a pre-notification communication explaining the reasons why the adverse decision has been made. The pre-notification is called your right to be heard and once issued you will have a period of 30 calendar days in which you may make further representations or provide further information to HMRC concerning the decision.

1.5 What do I do if I disagree with a Customs decision?

More information on reviews and appeals is available in factsheet, HMRC1: HMRC decisions - what to do if you disagree or you can phone the HMRC Orderline on Telephone: 0845 900 0404.

You can also view our guides Appeals against HM Revenue and Customs decisions.

2. Goods not in accordance with contract: repayment or remission of Import Duty and VAT

2.1 What are the conditions for repayment or remission?

You can claim repayment or remission of Import Duty and VAT on goods you have imported if:

• you have rejected them because at the time of declaring them to a Customs procedure involving payment of charges (such as release for free circulation), they
  • are defective
  • do not comply with the terms of the contract under- which they were imported
  • were damaged before being cleared by us
• the goods are those you declared to us
• you have not used the goods more than was necessary to establish that they were defective or did not comply with the contract
• you have not sold the goods after finding them to be defective or not to comply with the contract

2.2 Are there any restrictions on claims?

Yes. You must ensure your claims are:

• made within 12 months of the date the Customs charges became due (for example when declared for free circulation)
• for an amount exceeding 10 Euros

Contact your Customs business centre if you feel exceptional circumstances apply to a claim outside these limits. You will find their address in your phone book under ‘Customs and Excise’, and then ‘Excise and Inland Customs enquiries’.

2.3 How must I dispose of the goods?

You must first notify your Customs business centre on form C and E 1179. Ensure it reaches them at least 48 hours before you dispose of the goods. If disposal occurs before you have notified us, you could jeopardise your claim.

You must then dispose of the goods in one of the following ways:

• by exporting them outside the customs territory of the EC
• by destroying them
• by placing them in a customs warehouse or a free zone. We then treat the goods as non-Community goods, and you can subsequently declare them to free circulation or another customs procedure, or re-export them. See section 5 for further details about form C and E 1179 and the disposal procedures.

2.4 Can I claim for goods known to be defective before they were imported?

Not if you took account of the defective nature of the goods when the contract of sale was made.

2.5 Can I claim for defective parts?

Yes. You can claim where only part of an article is defective, and you meet all the other conditions. You must claim the difference between:

• the duty charged on the complete article as imported
• the duty which would have been charged on that article had it been imported separately without the defective part

You should use the rate of duty applying at the time of the original Customs declaration involving duty payment.

2.6 Can I claim for goods located in another member state?

Yes. If you:

• paid or are liable to pay the import duty and VAT
• meet the conditions for repayment in paragraph 2.1

you can claim on goods which are being rejected and are currently located in another member state awaiting disposal.

Equally, if you now hold goods which are being rejected after having been originally imported into another member state, the person in the other member state who paid or is liable to pay import duty and VAT may claim.

There are special procedures for dealing with rejected imports under these ‘triangulation’ arrangements. Your Customs business centre can give you full details.

2.7 Can I claim for Common Agricultural Policy (CAP) goods?

Yes. The conditions in paragraphs 2.1 to 2.6 apply with the following additional requirements.

Claims approved before disposal of the goods

If you paid Import Duty and/or CAP charges on goods imported from a non EC country and we allow your claim under this notice, the goods are considered to have been removed from free circulation. You cannot then claim any CAP export refund on the goods.

Pending claims

If we have not reached a decision on your claim under this notice before you export the goods, the following rules apply:

• goods subject to export refunds. If we subsequently refuse repayment under this notice, you may then claim an export refund
• goods subject to export charges. You must provide security for the amount of the export charge before exporting the goods. If we subsequently allow your repayment claim under this notice, we will discharge the security
• once they decide on your repayment claim, the Customs business centre will advise you how to obtain any adjustments under the above procedures

CAP import licences

You must present any CAP import licence on goods which are the subject of a claim under this notice to your Customs business centre together with a completed form C and E 1179.

CAP export licences

If your Customs business centre has approved your repayment claim, you will not require an export licence when you export the goods. However, you must provide an export licence if the claim is still pending although we will not permit advance fixing of the export refund or charge.

Notice 800: CAP exports, gives further details on the export of CAP goods.

2.8 Are there any special rules for VAT?

Yes. If you are a fully taxable VAT registered person importing goods for business purposes, you should deduct the tax as input tax subject to the usual rules.

If you are not registered for VAT or are partially exempt for VAT, you may use the procedures in this notice to claim a direct repayment of tax.

3. Goods in special situations: repayment or remission of Import Duty and VAT

3.1 What are the special situations?

You can claim repayment or remission of Import Duty and VAT on the goods imported when they are:

(a) stolen after entry to a system of duty relief, as long as the goods are recovered promptly and returned to the same duty relief system in the state they were in when stolen

(b) inadvertently withdrawn from a system of duty relief, but only if, as soon as the error is found, they are returned to the same duty relief system in the state they were in when withdrawn

(c) in a means of transport which it is impossible to open on arrival at its destination after the goods have been released for free circulation, as long as they are immediately re-exported

(d) after release for free circulation, returned to the non-EC supplier under outward processing arrangements to eliminate faults or bring them into line with contract, which the supplier then decides to keep because the defects cannot be remedied or it is uneconomic to do so

(e) now liable to charges but originally allowed duty relief and re-exported without customs supervision, as long as repayment would have been allowed at the time of export if the charges had been collected at import

(f) forbidden to be marketed by a judicial body, and are re-exported from the EC or destroyed under customs supervision, but only if they have not been used in the EC

(g) entered by a declarant empowered to do so on their own initiative and which, through no fault of this declarant, cannot be delivered to the consignee

(h) addressed to the consignee in error:

• eg wrongly labelled, not ordered by the consignee, or received in excess of the quantity ordered, but only if the consignee refused the goods immediately the excess was discovered (no claim may be made if the consignee accepts excess goods, as such action is considered to amend the original contract, even if the goods are subsequently rejected)
• the goods are re-exported to the original supplier or to an address specified by them

(i) found to be unsuitable because of an obvious factual error in the consignee’s order:- eg wrong goods received due to quoting an incorrect reference number

(j) found not to have complied, at the time of entry to free circulation, with the rules in force concerning their use or marketing and cannot therefore be used as the consignee intended

(k) unable to be used because of official measures taken after the date of entry for free circulation, eg new safety or hygiene laws prevent the goods from being used for their intended purpose

(l) entered to a system of duty relief which is refused through no fault of the consignee - eg where relief under a tariff quota is claimed but refused because the quota has been exhausted

(m) delivered to the consignee after a fixed delivery date - eg because of shipping delays

(n) unable to be sold in the EC and are to be donated to charities. The goods must be either:

• exported and given free of charge to a charity operating outside the EC, provided that the charity is also represented in the EC
• delivered free of charge to a charity operating within the EC, provided that the charity is eligible to import similar goods free of import duty under Notice 317 Imports by Charities free of duty and VAT or Notice 371 Importing goods for disabled people free of duty and VAT

(o) liable to customs charges for reasons other than entry to free circulation, for example by failure to meet post import conditions, but where Community transit or other documentation can be produced to prove entitlement to nil or reduced rates of charge

These situations do not represent the full range of circumstances under which we could repay or remit import duty and VAT. Contact your Customs business centre if you feel your situation justifies repayment or remission. We will decide your case on its merits. We will not repay or remit however, if:

• the only reason for re-export of the goods is failure to sell in the EC, and the goods are not being donated to a charity outside the EC
• the only grounds are that the goods have been destroyed after release for free circulation

3.2 What are the conditions for repayment or remission on ‘special situation’ goods?

You must not have used the goods nor sold them after import, and the restrictions in paragraph 2.2 apply. You can claim for goods now located in another member state under the terms of paragraph 2.6.

3.3 How must I dispose of ‘special situation’ goods?

Follow the procedures in paragraph 2.3, but if the relevant situation requires disposal in a particular way (paragraph 3.1), you must meet that condition.

3.4 Can I claim for ‘special situation’ CAP goods?

Yes, as long as you meet the conditions of paragraph 2.7.

3.5 Can I claim repayment of Excise Duty for ‘special situation’ goods?

No. You can only reclaim Excise Duty in the circumstances described in paragraph 4.1.

4. Goods not in accordance with contract: repayment of Excise Duty

4.1 What are the conditions for repayment of Excise Duty?

You may reclaim Excise Duty as long as the goods:

• were imported in pursuance of a contract of sale
• were not in accordance with the contract because they were of the wrong description, quality or condition or were damaged in transit
• have not been used more than was necessary to discover that they were defective or did not comply with the contract of sale
• have not been offered for sale after they were found to be defective or not in accordance with contract
• are, with the consent of the seller and under customs control, either:
  • returned by the consignee to the seller abroad
  • destroyed at the expense of the consignee

4.2 Are there any goods on which I cannot claim repayment of Excise Duty?

Yes. We will not repay Excise Duty on goods:

• imported on approval, ‘sale or return’ or similar conditions
• received in excess of the number ordered
• received after an agreed delivery date
• remaining unsold
• subject to licensing when a licence is not issued
• imported by or on behalf of a company that has gone into liquidation or receivership, and not covered by the conditions in paragraph 4.1
• imported because you made a mistake in the order

Note:

If you do not meet these conditions, you may still be eligible to claim Excise Duty drawback under the alternative arrangements described in Notice 207 Excise Duty: drawback.

5. How to claim

5.1 How do I make a claim?

You can make a claim if:

• you paid or are liable to pay the customs charges on the goods as a customs debtor (if in doubt about who is liable to pay the customs debt, see our Notice 199 Imported goods: customs procedures and customs debt)
• you are a representative authorised in writing to act on that person’s behalf
• you are someone who has taken over the customs debtor’s rights and obligations

Make your claim on form C and E 1179 in time to reach the following HMRC office at least 48 hours before you pack or destroy the goods:

The National Rejected Imports Team
HM Revenue and Customs
Excise and International Trade
Sapphire Plaza
Reading
RG1 4TE

The VAT, Excise and Customs Helpline can provide you with the form. It is also available on the website, go to www.hmrc.gov.uk.

We will accept your own plain paper or computer produced version of form C and E 1179 if it provides all the information we need.

Attach the following documents as appropriate:

• a copy of the import invoice
• documentary proof of entitlement (paragraph 5.3)
• a copy of the VAT certificate if you are claiming direct repayment of VAT
• a worksheet showing how you have calculated the amount to be repaid or remitted if your claim relates to only part of the imported consignment

If you are claiming for ‘special situation’ goods, state in part D of form C and E 1179 which situation - (a) to (o) of paragraph 3.1 - applies. If none of these apply but you feel that repayment or remission is justified, contact your Customs business centre as advised in paragraph 3.1.

If you are claiming for only part of an article (paragraph 2.5), include details of both the whole article and the component in part C of form C and E 1179, and head the details concerning the part: ‘component part to be disposed of’.

If you a private individual or a company not registered for VAT, please send your claim to:

The National Rejected Imports Team
HM Revenue and Customs
Excise and International Trade
Sapphire Plaza
Reading
RG1 4TE

Please include with your claim an invoice or similar commercial documentation, a worksheet with calculations and evidence of the goods disposal, for instance, a certificate of posting where goods ordered on the internet have been returned to the sender.

5.2 Will Customs attend the packing or destruction?

Our officer may attend to see the goods being packed for export or to witness destruction. We will not charge for attendance during normal office hours, but will charge for delays, abortive visits or for visits on Sundays, public holidays or outside the hours of 9am to 5pm on other days. See Notice 112A: attendance at private premises by HMRC, for more details about our charges.

If our officer does not attend at the time you specified on form C and E 1179, you may proceed with packing and export, or destruction.

5.3 What documentary proof do I need?

You must give us all relevant documents substantiating the basis for your claim.

For example, if your goods were damaged in transit, you could produce an insurance report showing that the damage happened before customs clearance.

Similarly, if it applies to your goods, you must provide proof that they were defective, or not in accordance with the contract under which they were imported, when they were declared to the Customs procedure involving payment of charges (for example, release for free circulation). This would normally be in the form of confirmatory correspondence from the overseas supplier.

When you claim repayment of Excise Duty (paragraph 4.1), you must produce the written consent of the overseas seller to re-export or destroy the goods.

If you want us to repay to someone other than the person who paid the customs charges as a customs debtor, you must attach a letter of authorisation from that person to your claim.

5.4 How do I export the goods from the EC?

If exported as freight you must complete the export SAD (C88), enter customs procedure code 10 40 01 in box 37, and obtain an export licence if required. Notice 275: export procedures, gives further details.

You need only one SAD entry per export consignment even though this may relate to importations through several ports and more than one form C and E 1179 claim.

Once our officer has examined the goods, or after the time notified for their packing has passed, you may export the goods.

After shipment, you must then quote the NES export declaration reference as soon as possible to your Customs business centre to ensure we can deal with your claim promptly.

5.5 What if I export the goods from the EC via another member state or dispose of them there?

You must complete box 1 of the SAD and where necessary place the goods under Community transit as described in the Transit Manual and Notice 750 community/common transit. You will also need a control copy T5 unless the claim is for excise duty only (see Volume 3 part 2 of the Tariff.)

When you are exporting the goods from the EC via another member state, make sure the SAD copy 3, endorsed by UK Customs, accompanies the goods to the EC frontier. See Notice 275: export procedures for further details.

5.6 What about exports by post?

You must fill in Form C and E 132. Label each package with form C and E 83A ‘Exported by post under Customs and Excise control’ - and make sure you complete an International Customs declaration (available from the Post Office) to go with it. If you require an export licence, you must attach it to the package and clearly write its number on the package.

If you address the goods to another member state (or to the Special Territories) and they do not have Community status, you must fix a yellow label C1130 to each package and the accompanying documents.

If you address the goods to the Special Territories and they have Community status you must fix a yellow label C1130 ST to each package and the accompanying documents (see the Transit Manual and Notice 750: community/common transit for further details).

After any examination by us, present the package and form C and E 132 to the Post Office, and they will give you a certificate of posting. You must then give the certified C and E 132 to your Customs business centre as soon as possible to ensure we can deal with your claim promptly.

5.7 What if I am destroying the goods?

Our officer may attend to witness the operation as explained in paragraph 5.2. You will have to bear any cost for destruction, and ensure that the method of destruction meets all environmental and health and safety requirements.

We will charge duty and VAT on any waste or scrap resulting from destruction of the goods unless you export it from the EC.

If our officer does not attend the destruction, you must provide proof that the goods have been destroyed to your Customs business centre as soon as possible to ensure we can deal with your claim promptly.

5.8 What document do I use to place the goods in a customs warehouse?

You must complete a SAD for your Customs business centre, omitting box 37. They will send a copy to our warehouse officer who in turn will confirm receipt of the goods to the business centre to enable your claim to proceed. We do not allow warehousing for goods on which repayment of Excise Duty is claimed.

5.9 What document do I use to place the goods in a free zone?

You must produce an extra copy of the claim form C and E 1179 to your Customs business centre. They will send it to our free zone officer who in turn will confirm receipt of the goods to the business centre to enable your claim to proceed.

5.10 When will Customs make a repayment to me?

In most cases you can expect this to be within 30 working days of giving your Customs business centre a properly completed claim form C and E 1179, as long as you present proof of satisfactory disposal of the goods in accordance with paragraph 2.3.

6. Glossary

Term	Definition
CAP	Common Agricultural Policy (of the EC)
Consignee	The person shown in box 8 of the SAD
Customs Union	The customs territories of the EC, Turkey, San Marino and Andorra. The unions between the EC and these countries enable most goods in free circulation to move freely between them without the need to pay import duty, subject to the production of any necessary preference or Community Transit documentation. In the case of Andorra, the union only covers goods in Chapters 25-97 of the Tariff. VAT and excise duty are (if appropriate) still due on imports from Turkey, San Marino and Andorra however
Declarant	The person shown in box 14 of the SAD
EC	The European Community: Austria, Belgium, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, the Republic of Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and the United Kingdom. The European Commission has advised that the application of the Community Customs Code and 6th VAT Directive shall be suspended in those areas of Cyprus in which the Government of the Republic of Cyprus does not exercise effective control. Goods from those areas will continue from 1 May 2004 to be treated as non-EC imports
Euro	The European single common currency unit. At the time of going to press, 10 euros was worth about £7
Excise Duty	An indirect tax on beer, wine, made-wine, cider, perry, spirits, mineral oil, cigarettes and other tobacco products
Free circulation	Goods of wholly EC origin, or goods imported into the EC on which all import duty has been paid and not refunded, and for which all import formalities have been completed are in free circulation
Import Duty	Taxes we charge on goods imported into the EC under the Combined Nomenclature of the EC. These include customs duty, Common Agricultural Policy (CAP) charges and Anti-Dumping Duty
Member state	A country within the EC
NES	The new export system, explained in Notice 276
SAD	Single Administrative Document - form C88
Special Territories	Countries or areas that are part of the customs territory of the EC but not part of the fiscal territory. VAT and Excise Duty (if appropriate) are therefore due on imports from these territories. The territories are: the Åland Islands, the Canary Islands, the Channel Islands, French Guiana, Guadeloupe, Martinique, Mount Athos and Reunion
Tariff	The Tariff is a 3 volume annual publication which is updated monthly containing useful information about customs import and export requirements
Triangulation	The special arrangements for repayment of import duty and VAT on goods located in a different member state from the one where those charges were paid
VAT	Value Added Tax

Your rights and obligations

Your Charter explains what you can expect from us and what we expect from you. For more information go to Your charter.

Do you have any comments or suggestions?

If you have any comments or suggestions to make about this notice, please write to:

HM Revenue and Customs
Customs Debt and Repayments
10th Floor Central
Alexander House
Southend on Sea
Essex
SS99 1AA

Please note this address is not for general enquiries.

For your general enquiries please phone our Helpline on Telephone: 0300 200 3700.

Putting things right

If you are unhappy with our service, please contact the person or office you have been dealing with. They will try to put things right. If you are still unhappy, they will tell you how to complain.

If you want to know more about making a complaint go to www.hmrc.gov.uk and under quick links, select Complaints and appeals.

How we use your information

HMRC is a Data Controller under the Data Protection Act 1998. We hold information for the purposes specified in our notification to the Information Commissioner, including the assessment and collection of tax and duties, the payment of benefits and the prevention and detection of crime, and may use this information for any of them.

We may get information about you from others, or we may give information to them. If we do, it will only be as the law permits to:

• check the accuracy of information
• prevent or detect crime
• protect public funds

We may check information we receive about you with what is already in our records. This can include information provided by you, as well as by others, such as other government departments or agencies and overseas tax and customs authorities. We will not give information to anyone outside HMRC unless the law permits us to do so. For more information go to www.hmrc.gov.uk and look for Data Protection Act within the Search facility.