Claims for excise duty where there has been an error by HMRC: making a claim under Schedule 3 of Finance Act 2001
Under CEMA section137A the person making the claim must have paid excise duty directly to HMRC.
This means that if a person has paid a duty inclusive price for excise goods to their supplier, as a result of an “official error”, they would not be able to claim under 137A. This is because they would not have paid excise duty directly to HMRC.
In such instances the supplier of the goods would have correctly accounted for excise duty and paid it directly to HMRC, not the claimant. Because the excise duty had been correctly paid at the time, the supplier could not submit a claim to repayment, since they had not paid it in error.
This means that excise duty paid in such instances cannot be repaid under the provisions of CEMA section137A.
What if the claimant paid excise duty directly to us as a result of our error?
If the claimant had paid excise duty directly to us, due to an error on our part then it is possible that they would be able to claim this duty under the provisions of both the FA 2001 Schedule 3 and CEMA 137A.
However Sub section (6) to CEMA 137A specifically prevents this. This states:
‘137A(6) This section does not apply in a case where the Commissioners are-
(a) entitled to pay an amount under Part I of Schedule 3 to the Finance Act 2001, or
Therefore when excise duty has been paid directly to us because of an error on our part, repayment of that excise duty cannot be claimed under the provisions of CEMA section137A.
What if there are provisions to repay excise duty already in the regulations specific to that excise regime?
If regime specific regulations contain provisions to repay excise duty (for the situations described at paragraph 3.1 in this guidance), via repayment, remission, rebate or drawback, then the provisions in those regulations should be used.
However you should note that Finance Act 2001, Schedule 3 allows for statutory interest to be claimed in instances of official error. If statutory interest is to be claimed then it must be done so under the appropriate paragraphs, of that schedule.
For more information on the claiming and payment of statutory interest refer to the Excise Statutory Interest Manual (ESIM).