Refunds and waivers on customs debt
- HM Revenue & Customs
- Part of:
- International freight industry and businesses making customs declarations
- First published:
- 28 April 2016
Find out about repayment and remission of customs duties under the Union Customs Code (UCC), and how to apply.
Repayment and remission
The terms used in the UCC are:
- ‘repayment’ - refunding an amount of import or export duty that’s been paid
- ‘remission’ - waiving the obligation to pay import or export duty that hasn’t yet been paid
Import VAT and excise duties
When duties can be repaid or remitted
Repayment or remission of customs duties can be granted when:
- you paid duties that weren’t legally due (for example, an overpayment) - UCC Article 117
- you reject the imported goods because they’re damaged or defective, or not in accordance with contract - UCC Article 118
- the debt results from an error made by customs authorities that you couldn’t have identified - UCC Article 119
- the debt results from circumstances that put you in an exceptional situation compared to other operators in the same business - UCC Article 120
- you paid duties but the customs declaration is invalidated by HMRC at your request - UCC Article 174
Examples of special situations mentioned in the previous Customs Code (Article 900 (1) of Commission Regulation 2454/93) don’t apply in the UCC.
If you have any claims for ‘special situations’ you’ll need to demonstrate an exceptional circumstance to support these. The circumstances must:
- be considered exceptional when compared to operators of similar businesses
- be outside of normal commercial risk for your business
- not be the result of any negligence or deception on your part.
How to apply
Time limit for submitting your claim
The time limit to submit your claim is:
- 3 years from notification of the debt - Article 117 (debt not legally due), Article 119 (error by customs authorities) and Article 120 (special situation)
- one year from notification of the debt - Article 118 (rejected imports)
- 3 months from the date the customs entry was accepted - Article 174 (invalidation of declaration)
If your claim relates to a matter not involving a C18 debt notification, then the date your customs entry was accepted by HMRC will be considered to be the date of notification.
Extensions to the time limits
You can only get an extension to time limits if exceptional and unforeseeable circumstances mean you can’t submit your claim in time. For example, a fire or flood has destroyed your records. You’ll need to contact HMRC to discuss if an extension can be granted.
Claim interest on late payment
You can make a claim for interest if HMRC fail to make repayment within 30 working days of receipt of a valid claim with all necessary supporting information. Write to the office you sent the original claim to.
If you don’t have all the information you need to submit a full claim, HMRC may accept a partially completed one. The minimum you need to include is:
- your name and address, or the name and address of your representative
- a list of customs declarations (or supplementary declarations for Customs Freight Simplified Procedures (CFSP) traders), or post clearance demands (form C18) relating to the claim
- details of the office that accepted the declaration or issued the C18
- the details of the next customs procedure (if any) you intend to apply to the goods and if you want authorisation for this before the repayment decision is made
HMRC will contact you after receiving your partial claim and give you a time limit to provide the rest of the information needed to complete it.
Protecting a future claim
You can ask HMRC to accept a ‘protective claim’ if you might have a claim in the future, but it depends on the outcome of an upcoming event. HMRC will consider it after the event concludes. HMRC has no obligation to accept these claims, but will look at them on a case-by-case basis.
An example of this is where a classification decision is being challenged at the Court of Justice of the European Union and the decision is likely to result in a lower duty liability.
You must keep all documentation supporting your claim in case you’re asked to provide it at a later date. You must write to the office you sent your claim to within 30 days of event to report the outcome or your application will be deemed to have been withdrawn.
Special provisions for mail order goods
You can ask HMRC to invalidate a customs declaration and repay duties on mail order goods if:
- your request is submitted within 3 months of HMRC accepting the declaration
- the goods have been exported to the supplier’s original address, or another address provided by them
To meet the definition of mail order:
- the contract is concluded on the basis of the trader’s catalogue, which you’ve had proper opportunity to read
- there’s intended to be a continuity of contract between you and the trader in relation to that, or any subsequent, transaction
- both the catalogue and the contract clearly tell you about your right to return the goods to the trader in a period of no less than 7 days, or otherwise cancel the contract without any obligation other than to take reasonable care of the goods
Cases dealt with by the European Commission
In certain circumstances, cases must be referred to the European Commission for consideration. This happens when there’s a special situation, or customs error, and either:
- the debt exceeds 500,000 euros in value
- the debt results from an EU investigation
You’ll be notified if HMRC refers your case to the Commission, and HMRC will continue to consult with you about the content and any further information they’re requested to provide.
Time taken to reach a decision on these cases will vary based on complexity, but can take over a year.
Claims for rejected imports
You can claim repayment or remission on goods imported from outside the EU when:
- you’ve rejected the goods because at the time of declaring them to a customs procedure they’re :
- damaged before being cleared by customs
- not compliant with the terms of the contract under which they were imported
- they’re the same goods from the original customs declaration
- you’ve not used any goods, other than the minimum necessary to establish they were defective or didn’t comply with the contract
- you’ve not sold the goods after finding them to be defective, damaged or not compliant with the contract
- the goods will be re-exported or destroyed
You can’t make a claim if you already knew the goods were damaged or defective when the contract for sale was made.
You must submit your C&E1179 claim form at least 48 hours before the goods are packed for re-export or destruction.
Claims for defective parts
You can claim for repayment of duties where only part of the goods are defective. You must only claim the difference between:
- the duty charged on the whole of the goods
- the duty that would have been charged, had it been imported without the defective parts
You must use the rate of duty that applied at the time of the original customs declaration.
Goods located in another member state
You can claim for goods that are being rejected and are currently located in another member state, as long as you have paid or are liable to pay the import duty.
Also, if you’re holding goods that are being rejected having originally been imported into another member state, the original importer can submit a claim.
There are special procedures for dealing with this situation. Contact HMRC for more information.
Rejected Common Agricultural Policy (CAP) Goods
On claims approved before the disposal of goods that you’ve paid import duty or CAP charges on, the goods are considered to have been removed from free circulation.
You must send any CAP import license on goods subject to a claim with your completed form C&E1179.
Published: 28 April 2016