The Upper Tribunal has ruled that HMRC is entitled to assess traders in possession of excise goods for excise duty where there is no evidence that the duty has been paid. When buying excisable products, businesses are advised to ensure that procedures are in place to evidence that a duty point has occurred and excise duty has been paid earlier in the supply chain.

1. © 2016 Grant Thornton UK LLP. All rights reserved.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms
provide assurance, tax and advisory services to their clients and/or refers to one or
more member firms, as the context requires.
Grant Thornton UK LLP is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member
firm is a separate legal entity. Services are delivered by the member firms. GTIL does
not provide services to clients. GTIL and its member firms are not agents of, and do not
obligate, one another and are not liable for one another’s acts or omissions.
This publication has been prepared only as a guide. No responsibility can be accepted
by us for loss occasioned to any person acting or refraining from acting as a result of
any material in this publication.
grant-thornton.co.uk
GRT100456
Summary
The Upper Tribunal has
ruled that HMRC is
entitled to assess traders in
possession of excise goods
for excise duty where there
is no evidence that the duty
has been paid.
When buying excisable
products, businesses are
advised to ensure that
procedures are in place to
evidence that a duty point
has occurred and excise
duty has been paid earlier
in the supply chain.
19 October 2016
Upper Tribunal
What's the issue?
B&M Retail Limited ("B&M") acquired excise goods from a supplier but could not provide
any definitive evidence that the excise duty due on the goods had been paid. After
investigating, HMRC raised a combined duty and penalty assessment of over £7 million.
B&M appealed the decision to the first tier tribunal, which ruled that the duty point arose
prior to B&M taking possession of the goods and, as such, B&M was not liable for the
payment of duty. The FTT's decision concluded that there cannot be more than one excise
duty point and, in the circumstances, the excise duty point arose when the goods were
either imported or "released for consumption" by the person who supplied the excisable
goods to B&M, or before.
Upper Tribunal appeal
Not surprisingly, HMRC appealed the decision to the Upper Tribunal. HMRC's appealed
on the grounds that the decision was incorrect in law, and HMRC has to consider the facts
in front of it when making an assessment. In addition, HMRC submitted that that the FTT
erred in law by finding that B&M were not a person liable to excise duty.
The Upper Tribunal judgment
HMRC argued that once excise goods have been released for consumption, it is incumbent
on the tax authority to ensure that the excise duty is paid. In circumstances such as this
where the tax authority is unable to ascertain a previous duty point, the tax authority should
be able to assess the holder of the goods, even when the holder is not necessarily the
person who released the goods for consumption. HMRC argued that if this were not the
case, the tax authority would not be able to collect evaded excise duty if exciseable goods
were discovered beyond the excise duty point. The tribunal agreed with HMRC's
arguments but ruled that should B&M be able to produce evidence that the excise duty has
in fact been paid, any assessment for duty should be withdrawn.
What should traders do?
This judgment firmly puts the emphasis on the holder of excisable goods to prove that
those goods have been duty paid. Clients should ensure that when purchasing excisable
goods, definitive evidence that the excise duty has been paid should be obtained from the
vendor and retained.
Businesses dealing in exciseable goods are advised to ensure that they only purchase alcohol
products from AWRS registered suppliers (this will become a legal requirement in 2017. )
If you wish to discuss this further, please contact one of our duty specialists below.
B&M Retail Limited v HMRC
Excise Alert
Contact
Adam Taylor Customs Senior Manager Adam,R.Taylor@uk.gt.com (0)117 305 7843
Ben Price Customs Manager Ben.D.Price@uk.gt.com (0)207 728 3426
Ilektra Sarri Customs Executive Ilektra.Sarri@uk.gt.com (0)207 728 3437
Michael Alexander Customs Executive Michael.D.Alexander@uk.gt.com (0)207 728 2532