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HMRC internal manual

Import and National Clearance Hub Procedures

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HM Revenue & Customs
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Special directions: repayments and remissions

General

Under the UCC the following definitions shall apply:

  • ‘repayment’ means the total or partial refund of import duties or export duties which have been paid
  • ‘remission’ means either a decision to waive all or part of the amount of a customs debt or a decision to render void an entry in the accounts of all or part of an amount of import or export duty which has not been paid.

Duty repayment claims are processed by the National Duty Repayment Centre (NDRC) Salford, and claims for remission under Code Article 239 are dealt with by the Duty Liability Team, 10th Floor West, Alexander House, Southend).

General information on repayment and remission of import duties can be found in Notice 199 Section 8.

The Policy Team responsible for repayment and remission of import duties is Duty Liability Team who can be contacted on 03000 593704, 593046 or 594127.

In the first instance the VAT, Excise and Customs Helpline (open 08.00 to 18.00) should be contacted on 0300 200 3700.

For repayments of VAT and / or Excise duties see paragraph below ‘Basis for repayment / remission of import duties’.

These guidelines do not apply to:

  • routine repayments of duty under IP drawback procedures detailed in the Inward Processing guidance, except for changes to incorrect values, which are dealt with by NDRC (the NDRC is now based in the NCH)
  • repayments of deposits (MOPs N, P, Q, and U and security deposits) which are proper to NIDAC (these can also relate to Temp Admissions controlled by NTIS)
  • repayments on goods rejected by the importer, for example, they are defective or claims covered by the specific situations listed in Notice 266 paragraph 3.1.
  • repayments against warehousing warrants.

Basis for repayment / remission of import duties

Articles 116 to 123 cover the rules for repayment and remission of duties.

Repayment or remission of import duty can be made when:

(a) the customs duty applies in these cases:

  • exceeds for any reason the amount legally owed, or
  • relates to goods in respect of which a Customs debt has not arisen, or
  • relates to a Customs debt which has been invalidated by a court decision
  • a customs error which could not reasonably have been detected by the trader.

Repayment or remission under the last bullet point should not be made without consulting the Duty Liability Team in Southend. ‘Customs’ can also include Customs in another MS or a third country authority responsible for issuing certificates affecting import duties.

Article 117 also applies, for example, in cases of:

  • short shipment
  • tariff classification errors
  • overvaluation or belated claims to preference, quota, conditional relief, and re-importation relief.

The amount due may not be legally owed, but repayment / remission can still be refused if there is evidence that it was a result of deliberate action by the person concerned eg knowingly entering goods at the wrong heading to obtain quicker clearance. Where there is evidence of deliberate action, consult the Duty Liability Team 10th Floor West, Alexander House, Southend before any repayment / remission is made.

(b) the goods have been incorrectly entered for free circulation. Examples are where the goods were intended for non-free circulation regimes such as IP (but not IP drawback), Temporary Admissions (TA) Customs warehousing or trans-shipment outside the EU.

Repayment claims under Article 117 do not apply to goods that are in free circulation even though there may be a claim for a change in CPC on the original entry. The conditions for repayment are tightly drawn and it is not a sufficient condition for traders to change their minds after the goods have been released for free circulation. There must be positive evidence of the original intention and proof that an error was made when the goods were entered for free circulation. Also goods should not have contravened the conditions of the regime to which they should have been entered. If repayment is permitted the original entry is to be invalidated and a substitute entry required in all circumstances. Entry to the new regime must be made and the substitute entry given a number and date. The number and date of the substitute entry shall be the same as that of the invalid entry. (INCHP02480 refers)

Implications of European Court of Justice rulings

Judgement 11/89

In accordance with Article 8(1) of Council Directive 79/695/EEC, having chosen a Method 1 sale, an importer may not correct the original declaration after the goods have been released for free circulation.

You must reject claims made after importation for a declared value to be revised and based on an earlier sales value. The reason for this is that each sale in a series is deemed to be legally valid in its own right.

Extending time limits

Notice 199 paragraph 8.4 lists the time limits for accepting applications.

Code Article 121 states claims can be accepted beyond the 3-year period if there is evidence of unforeseeable circumstances or ‘force majeure’. These are circumstances that are abnormal and unpredictable beyond the trader’s control, whose consequences could not have been avoided despite the trader exercising all due care.

Code Article 121 states claims can be accepted beyond the one-year period if exceptional circumstances prevented a claim being made within the time limit. These do not include:

  • difficulties connected with the trader’s computer system
  • lack of resources available to the trader.

If you consider the trader has reasonable grounds for the time limit to be extended, refer the case to Duty Liability Team.

Claims repaid in error

If a repayment claim has been authorised and payment made to the trader in error, then the original debt becomes payable immediately. However, any notification of the debt under this Article must be within the time limits of the original debt. For example, if the amount repaid relates to a debt incurred on the original import declaration, then the 3 year notification rule is from the date of the declaration not the date the repayment was made. (Article 103 refers)

Where the repayment was made due to Customs error including cases where the claim had flaws that were undetected because it was not checked Duty Liability Team should be consulted.