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HMRC internal manual

Debt Management and Banking Manual

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HM Revenue & Customs
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Debt and return pursuit: Air Passenger Duty (APD): Power to assess and recover as duty due

The power to assess (e.g. prime assessment) is at section 12 (1) of the Finance Act1994). See X-51 Civil penalties and assessments.

Errors & Assessments Policy Team has policy for assessments.

A copy of the assessment is to be provided to Enforcement and Insolvency Service (EIS)when reporting the debt for civil recovery action.

Power to recover assessed amounts as duty due

The power to recover assessed amounts as duty due can be found in Section 12 (3) of theFinance Act 1994.

Power to recover as duty due, assessments in respect of overpaid APD or statutoryinterest

We are liable to pay statutory interest on overpayments of APD. If we find that aperson was not entitled to statutory interest repaid, we can attempt to recover it(paragraph 15 (1) of schedule 5 to the Finance Act 1997).

Amounts assessed in respect of overpaid APD or statutory interest are recoverable as dutydue, under paragraph 16 (2) of Schedule 5 to the Finance Act 1997.

Power to recover duty due, amounts assessed as interest or further interest in respectof overpaid APD or statutory interest

An amount assessed as interest under paragraph 17 (2) of schedule 5 to the Finance Act1997, is recoverable as duty due. Paragraph 17 (7) of schedule 5 to the Act provides:

“Where an amount has been assessed and notified to any person under this paragraph itshall be recoverable as if it were relevant tax due from him.”

Penalties Team has policy for interest and civil penalties.

Unjust Enrichment

We are liable to repay overpayments of APD. But if the operator’s customers wereovercharged (hence the overpayment of APD), it would be unjust to return the money to theoperator. In the circumstances, we can refuse to repay the overpaid amount unless theoperator can assure us that the money will go to the customers who paid it in the firstplace. There is a special scheme.

Registered persons who operate the special scheme have 90 days to refund the money totheir customers. Any money not refunded by that time must be returned to us. If the moneyis not returned to us, we may issue an assessment to recover it under paragraph 14 (1) ofschedule 5 to the finance Act 1997.

Power to assess and recover penalties as duty due

The CCU generates automatically penalties for failure to pay duty (Form APD 31 and 32(additional)). Other penalties are issued on form APD 40. The power to recover penaltiesas duty due is s.13 (5) of the Finance Act 1994. All civil penalties are subject to reviewand appeal.

Penalties Team has policy for civil penalties.

Time limits for making assessments

A debt reported for civil recovery action must be capable of being enforced. See X-51Civil Penalties and Assessments for time limits for making assessments.