DMBM535100 - Debt and return pursuit: excise duties: power to take recovery action for an excise debt
The majority of this manual will be archived on 30 Apr 2024. If there is content within this manual you use regularly, email hmrcmanualsteam@hmrc.gov.uk to let us know.
Any amount by way of customs or excise duty may be recovered as a debt to the crown (s.137 (1) of the Customs and Excise Management Act 1979).
Amounts assessed (including penalties) as due from any person are deemed to be amounts of the duty in question and may, therefore, be recovered as debts due to the Crown.
Debts due to the Crown
The legislation connected to Excise Duty can be viewed on DMBM450150.
Power to recover a debt established in a written demand
Before certain dates (e.g. before 1 June 1997 in relation to persons not required to make a declaration or return), we had no power to assess in specific circumstances but we had the power to demand payment of the sum due.
The debt stated in the demand letter was established under the relevant provision in the law. For civil recovery purposes, these debts “crystallised” on the date that the demands were issued.
There is no legal right to a review or appeal, and debts are recoverable immediately. Amounts due in demand letters are excise duty and are recoverable as debts due to the crown.
Power to recover amounts of overpaid excise duty
If we repay overpaid duty in error we can attempt to recover it by assessment made under paragraph 14 (1) of schedule 5 to the Finance Act 1997. The amount assessed is recoverable as if it were the relevant tax under paragraph 16 (2) of schedule 5 to the Act.
Power to recover as duty due, amounts assessed where there is no requirement to make a declaration or to render a return
The power to recover as duty due amounts assessed where there is no requirement to make a declaration or to render a return, is s.12A (3) of the Finance Act 1994 as inserted by paragraph 1 of Schedule 6 to the Finance Act 1997.
Power to recover amounts due on deficiencies in the stores of aircraft or ships that are cleared to leave the UK and then return to the UK
Section 61 (7A) of CEMA 1979 provides:
“No amount of excise duty shall be payable under subsection (7) above unless the Commissioners have assessed that amount as being excise duty due from the master of the ship or the commander of the aircraft and notified him or his representative accordingly.”
The power of recovery is specified in s.61 (8A) of the Act:
“An amount of excise duty assessed as being due under subsection (7A) above shall, unless, or except to the extent that, the assessment has subsequently been withdrawn or reduced and subject to any appeal under section 16 of the Finance Act 1994, be recoverable summarily as a civil debt.”
This gives us the option to take civil recovery action or default action. For more information on default action contact the Enforcement Technical Team, Liverpool.
Power to recover amounts due in respect of untrue declarations
Section 167 (4) of CEMA 1979, provides:
“Where by reason of any such document or statement as is mentioned in subsection (1) or (3) above the full amount of any duty payable is not paid or any overpayment is made in respect of any drawback, allowance, rebate or repayment of duty, the amount of the duty unpaid or of the overpayment shall be recoverable as a debt due to the Crown.”
This power of recovery is conditional on there having been an assessment issued first. Section 167 (5) provides:
“An amount of excise duty, or the amount of an overpayment in respect of any drawback, allowance, rebate or repayment of any excise duty, shall not be recoverable as mentioned in subsection (4) above unless the Commissioners have assessed the amount of the duty or of the overpayment as being excise duty due from the person mentioned in subsection (1) or (3) above and notified him or his representative accordingly.”
In practice, an assessment is generally made under s.12 (1) of the Finance Act 1994, although legally s.167 (5) constitutes a power of assessment in its own right.
Power to recover amounts due under s.20AAB (Mixing of rebated oil) of the Hydrocarbon Oil Duties Act 1979
Section 20AAB (4) of the Hydrocarbon Oil Duties Act (HODA) 1979 provides the power to assess:
“Subject to subsection (7) below, where it appears to the Commissioners-
(a) that a person has produced or supplied a mixture on which duty is charged under section 20AAA above, and
(b) that he is the person liable to the duty,
they may assess the amount of duty due from him to the best of their judgment and notify that amount to him or his representative.”
Section 20AAB (5) provides:
“An assessment under subsection (4) above shall be treated as if it were an assessment under section 12(1) of the Finance Act 1994.”
Power to recover penalties as duty due
The power to recover penalties as duty due is s.13 (5) of the Finance Act 1994. All civil penalties are subject to review and appeal. Penalties Team has policy for civil penalties.