Deficiencies in warehoused oil: Trader's Explanations for Deficiencies: Further action
If an explanation satisfactorily accounts for the whole of the excess deficiency, it may be accepted at the place of despatch.
If as the officer for the warehouse of despatch you are not satisfied with the explanation given you should check the advised particulars shown on the certificate of receipt given on the Delivery Note, W8 or eAD report of receipt (see Notice 197) against the despatching warehouse-keepers records and require amendment of any errors.
Otherwise, if the whole deficiency is allowable, the papers are to be noted accordingly. Normally a trader’s explanation is not required.
In other cases, there is no objection to the acceptance of explanations, either oral or written, prior to the issue of a request for explanation.
If after obtaining information, and any necessary discussions with the trader, it is decided that an explanation is unacceptable, an assessment should be issued* (see the Note below) calling for payment of duty (and if appropriate VAT). The reason for rejection should be stated in that letter, e.g. the explanation:
- Does not indicate how the deficiency occurred; or
- Does not indicate what happened to the oil deficient; or
- Is not consistent with (e.g. the dips taken at ……, the time and rate of leakage); or
- Is inadequately supported by evidence of ……. (e.g. spillage, or meter error).
If an explanation appears to require only minor amplification to make it acceptable, the trader should be requested to furnish further particulars and the 3 month time limit may if necessary be extended one month.
The quantity for payment of duty and VAT should be calculated in the same way as the deficiency shown in the initial letter requesting an explanation from the trader, and the reason stated in the letter demanding duty payment for any difference (e.g. allowance for accidental loss or diversion: amendment for advised or received quantity).
Note: Before an assessment is issued, consideration must be given to where the loss was detected, and to where the loss actually occurred (i.e. did it occur in the UK or within the EU?), as there is a potential danger of “double taxation”, that is of any charges being raised twice, once in the UK as the Member State of Despatch, and once in another Member State as either the Member State of Transit, or Destination.
For further information please se the section on ‘Intra-EU Movements’ in this guidance. HCOTEG50000
No reply to request for explanation
If at the expiration of the time limit (as extended in certain cases) a reply has not been received to the letter requiring an explanation, you should advise the Debt Management Unit to take enforcement action.