Judgment summary
This appeal concerned HMRC's decision, upheld on review on 27 September 2024, to restore to the Appellant a MAN tractor unit (registration PK6950R) and a Krone trailer (PK3047P), seized on 12 June 2024, on payment of £6,845 (1).
The Appellant had not lodged a notice of claim under Schedule 3 to the Customs and Excise Management Act 1979, so the goods and vehicle were deemed condemned as forfeited, and the Tribunal proceeded on the basis that the seizure was lawful (2). The sole issue before the Tribunal was whether HMRC's restoration decision was one that no reasonable decision-maker could have reached (2).
The Tribunal found that HMRC had correctly applied its restoration policy, considered the Appellant's documentation and representations, consulted Border Force, addressed proportionality and hardship, and reached a decision within the range of reasonable responses open to it (19). The appeal was dismissed (20-21).
Background
On 12 June 2024 the vehicle and trailer were stopped at Cairnryan in Scotland en route to Kingston upon Hull, having travelled from the Netherlands via Rosslare in the Republic of Ireland, where the trailer had been detained for a period (3).
A search revealed pallets of BBQ charcoal and tyres at the front of the trailer and 26 pallets of beer behind them. There was no evidence that duty had been paid on the alcohol, so HMRC seized the beer, vehicle and trailer (4).
The beer originated from a supplier in the Netherlands and was stated to be destined for an address in Kingston upon Hull. Documentation including a CMR, invoice, import declaration and evidence of a payment of £29,315 was subsequently provided to HMRC (5).
HMRC considered that it could not establish that this documentation related to the beer actually found in the vehicle, and the Border Force Revenue Fraud Detection Team was likewise unable to verify the duty status of the beer (6).
On 8 July 2024 HMRC offered restoration of the vehicle and trailer for £6,845, representing 20% of the duty value calculated for the beer, namely £34,225 (7).
AW requested a review, contending he was an innocent haulier, had supplied all available documentation, that the beer had previously been detained by Irish Customs, and that the restoration charge together with associated costs exceeded the value of the vehicle and trailer and would cause financial hardship (8). The review officer upheld the decision, concluding that the restoration policy had been correctly applied, the documentation did not conclusively establish duty-paid status, the charge was proportionate, and no exceptional hardship or humanitarian circumstances had been demonstrated (9).
Core dispute
The dispute was whether HMRC's restoration decision, offering restoration of the vehicle and trailer on payment of £6,845, was unreasonable in the public law sense. The Tribunal's jurisdiction was limited to considering whether HMRC acted unreasonably, took account of irrelevant matters, failed to take account of relevant matters, misdirected itself in law, or otherwise reached a decision that no reasonable decision-maker could have reached (12).
AW argued he was innocent of any dishonesty, had supplied documentation evidencing duty payment, that the restoration charge exceeded the value of the vehicle and trailer, and that the seizure had caused him financial hardship (13, 16, 17).
Court findings
The Tribunal accepted that there was no evidence AW personally engaged in dishonesty, but found that innocence was not determinative, since HMRC's policy proceeds on the basis that vehicles used in carriage of goods liable to forfeiture will not normally be restored, for purposes of deterrence and protection of the revenue (13).
The Tribunal found that HMRC did not ignore AW's documentation, that the officer had expressly considered it and made enquiries of Border Force, who were unable to verify that the payment and documentation related to the beer actually present on 12 June 2024, a conclusion the Tribunal considered reasonable for HMRC to reach (14). HMRC had also identified discrepancies, including a difference between the duty shown as paid (£29,315) and the duty calculated by HMRC (£34,225), which it was entitled to take into account (15).
On the argument that the restoration charge exceeded the value of the vehicle and trailer, the Tribunal found that HMRC had specifically considered the point and provided market evidence indicating significantly higher values than those claimed by AW (16). Any potential subsequent deterioration in condition of the vehicle and trailer was not considered relevant to HMRC's decision (16).
The Tribunal accepted that the seizure had caused AW financial hardship, but found that the review officer had expressly considered hardship and concluded no exceptional circumstance existed justifying departure from the normal policy, a conclusion the Tribunal did not consider irrational (17). The Tribunal noted HMRC had not refused restoration altogether but offered restoration on payment of 20% of the duty value, reflecting consideration of proportionality rather than rigid policy application (18).
Overall, the Tribunal was satisfied that HMRC understood the relevant facts, considered AW's representations and documentation, applied the published restoration policy, considered proportionality and hardship, and reached a conclusion within the range of reasonable responses open to it (19).
Outcome
The Tribunal was not satisfied that HMRC's review decision was unreasonable (20).
The decision to offer restoration of the vehicle and trailer upon payment of £6,845 was one which HMRC was entitled to make and was not shown to be disproportionate, irrational, or otherwise flawed in public law terms (21). The appeal was dismissed.
Major issues / areas of contention
- Whether HMRC's restoration decision, offering restoration on payment of £6,845, was unreasonable in the public law sense
- Whether HMRC properly considered the documentation provided by the Appellant purporting to evidence duty payment on the beer
- Whether the restoration charge was proportionate given discrepancies between claimed duty paid (£29,315) and HMRC's calculated duty (£34,225)
- Whether the restoration charge exceeded the value of the vehicle and trailer
- Whether financial hardship constituted an exceptional circumstance justifying departure from HMRC's restoration policy