24/10/16: B&M Excise Duty Appeal Overturned by the Upper Tax Tribunal

Monday, October 24th, 2016

The Upper Tax Tribunal (‘UTT’) has overturned the First Tier Tax Tribunal’s decision which was in favour of B&M Retail Ltd, in a preliminary matter concerning B&M Retail Ltd.’s appeal against an excise duty of £5,875, 143 and an excise penalty of £1, 175,028.60.   The preliminary issues on the appeal was:

  • whether there can be more than one excise duty under the Regulations;
  • whether, after goods have been released for consumption, there can be a further release for consumption without those goods being again charged with duty by reason of some further production or importation;
  • whether that person can be liable for the excise duty if there was an earlier duty point.

The UTT concluded that the recognition by HMRC that one or more excise duty points must, in principle, have been triggered before B&M received the goods did not preclude HMRC from assessing B&M for excise duty.  The UTT remitted the case back to the FTT to reconsider whether the assessment was made ‘out of time’; whether the evidence does show that the excise duty payable on the goods remains unpaid; and to consider the penalty assessment.

The UTT has come down heavily in favour of HMRC and it is important that alcohol traders ensure they are satisfied with the integrity of the supply chain by checking the source of the goods is bona fide.  Businesses need to ensure they undertake good due diligence on their suppliers.  Please contact M&R Tax if you believe we may be able to assist you with your due diligence.