Excise Duty

    July 2013

    For reasons unknown, my eye was drawn to the Upper Tribunal decision in HMRC v Europlus Trading Limited FTC/38/2012 [2013] UKUT 108 (TCC), which concerned a reclaim of excise duty on the export of beer. In essence, the company made a claim for repayment of excise duty and HMRC rejected it. (Stay with me; it gets better). The First-tier Tribunal found in favour of the taxpayer. Its decision covered five points:

    • HMRC had applied new requirements to the duty clawback conditions;
    • the tribunal had jurisdiction to consider whether HMRC had contravened EU principles;
    • HMRC had contravened EU principles;
    • HMRC had breached Art 1 of Protocol 1 of the European Convention on Human Rights;
    • the tribunal ordered the payment of the company’s drawback claims.

    HMRC appealed to the Upper Tribunal. I have no knowledge or interest in excise duty on beer but the result is disquieting. The appeal judge said the tribunal had got absolutely everything wrong. They got the facts wrong, their conclusions were wrong, they had no jurisdiction…everything.

    I suppose these things happen but it is very dispiriting for the taxpayer (or the professional adviser) when such a distinguished tribunal can get everything so completely wrong—assuming, of course, that the Upper Tribunal is correct. What chance does the taxpayer have in understanding his obligations when faced with this situation? I would merely observe that it seriously undermines the authority of the First-tier Tribunal if such experienced judges are found to be so comprehensively mistaken.