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June 2, 2021 | Silver Law
This third and last article gives important guidance and information about what to do if you have had something seized by HMRC or Border Force and covers the return of or restoration for seized goods. It only applies to the seizure of things, such as goods and vehicles, under section 139 of the Customs and Excise Management Act 1979.
HMRC Or Border Force Policy On The Return Of Seized Items
HMRC and Border Force’s general policy is not to return seized excise goods (such as alcohol or tobacco products), vehicles used for commercial smuggling or anything that is prohibited (such as illegal drugs, offensive weapons or endangered plant and animal species) or where there has been an attempt to evade any duty. However, they will consider all requests for the return of seized things and take all relevant facts into account.
The process of returning a seized thing to someone is called restoration. HMRC and Border Force normally only restore a thing to its rightful owner, but they will take arrangements with third parties such as your solicitor into consideration.
If you want goods returned because you believe they should not have been seized in the first place, perhaps because you claim excise goods are for your ‘own use’, the only avenue open to you is to challenge the legality of the seizure by sending a notice of claim.
When Can You Ask For Restoration?
You can ask HMRC or Border Force to consider returning the seized thing even if:
Your goods will not be restored if your reason for that request is that things were not legally seized or, in the case of excise goods, they were imported for your ‘own use’. You should challenge the legality of the seizure instead bearing in mind the one calendar month time limit for doing that.
If the seizure involves a vehicle, it may have been restored to you immediately after it was seized, perhaps on payment of a restoration fee.
How Do I Ask For Restoration?
You should ask for restoration of a seized thing in writing, and you must make it clear that you want the seized thing or things restored to you. When posting a letter to HMRC or Border Force, you should get proof of posting and keep it for your own records.
To help HMRC or Border Force deal with your request quickly, your letter should:
HMRC or Border Force will normally acknowledge your letter within 10 working days of receiving it.
Time Limit For Requesting Restoration
There is no time limit in law although HMRC or Border Force usually expects to receive a request for restoration of a seized thing within one calendar month of the date of seizure or the date on the Notice of Seizure.
Disposal Of Seized Items
HMRC and Border Force will dispose of perishable goods (including tobacco, beer and all food products) as quickly as possible. They usually begin disposing of non-perishable things (such as vehicles and spirits) 45 days after the date of seizure unless the legality of the seizure is challenged, or they receive a restoration request. In those cases, they usually keep the goods until the challenge or restoration is decided.
They will normally dispose of vehicles if storage costs are likely to exceed the value of the vehicle and where a restoration request has been considered and refused, whether or not you have asked for a review.
If the seized thing has been destroyed, HMRC or Border Force cannot restore it to you but they will usually offer you an appropriate payment instead. This may be an amount equal to the sum paid by you for the goods in question or an amount equal to the proceeds of sale (where HMRC or Border Force have sold the goods in question) or an amount equal to the market value of the goods at the time of seizure and not including any additional compensation (for costs, travel expenses, interest).
What Happens When HMRC Or Border Force Receives A Restoration Request
When HMRC or Border Force receives a request for restoration, they consider all the facts and decide either to offer or refuse restoration.
If they offer to restore a seized thing, it will normally be on payment of a fee, which will vary depending on the specific circumstances. They may also ask you to pay any duty and/or VAT due. If you accept the offer and comply with any conditions related to it, the seized thing can be returned to you.
If you accept the restoration offer and take back possession of the seized thing but you are unhappy with the fee you paid, you can ask for a review of the restoration decision.
What If HMRC Or Border Force Refuses Restoration Or You Disagree With The Restoration Conditions
If you do not agree with HMRC’s or Border Force’s restoration decision, you can ask for it to be reviewed by an officer not previously involved in the matter. The letter giving you the restoration decision will tell you how to ask for a review. If you ask for a review, you should clearly set out the reasons why you disagree with the decision and include any supporting evidence.
What Happens When A Restoration Decision Is Reviewed?
An impartial review officer, who was not involved in the decision on the restoration of the seized thing, will consider your case and go over all documents relating to it. The review officer may contact you to explain or to ask for more information.
The review officer can confirm, vary or cancel the original decision. If the decision to be reviewed involves a restoration fee, the review officer may increase or decrease the fee or vary the decision to non-restoration or cancel the original decision. They will write to you to tell you the outcome of the review, and what to do if you disagree with it.
Time Limits For Restoration Reviews
Your letter asking for a review must be received by HMRC or Border Force within 45 days of the date of the restoration decision letter, whether it is a request for a review of the decision to refuse restoration or of the restoration conditions, such as the decision to charge a fee. HMRC or Border Force then have up to 45 days from the date they receive your letter to carry out a review and tell you the outcome.
If you ask for a review after the 45-day time limit has expired, it will not be accepted unless you can give a reasonable excuse. So, if your review request is outside the time limit, you should explain why it is late when making your request. If appropriate, you should include proof of postage.
If HMRC or Border Force does not agree that the reasons why your review request was late amount to a ‘reasonable excuse’, you can appeal to an independent tribunal against their refusal. You must make that appeal within 30 days from the date of the refusal letter.
What If I Disagree With The Outcome Of The Review
If you disagree with the review officer’s decision you have the right to appeal to a tribunal within 30 days of the review conclusion. The Tax tribunal is independent of HMRC and Border Force. You should send your appeal against the review officer’s decision to the HM Courts and Tribunals Service and not to HMRC or Border Force. You must include a copy of the original restoration decision by HMRC or Border Force and a copy of the review officer’s letter telling you of the outcome of their review.
You can directly appeal to the Tax Tribunal without having a review
You can directly appeal to the Tax tribunal about decisions involving restoration if you do not wish to seek a review of the restoration decision. You cannot seek a review and appeal to the Tax Tribunal, simultaneously. You have to decide on one option that is to either seek a review or appeal directly. You cannot do both.
You can have a restoration decision reviewed when you are challenging the seizure
You can send a notice of claim challenging the legality of the seizure to HMRC or Border Force and still ask for restoration of seized things. You can then ask for a review of the restoration decision before condemnation proceedings take place in court. If you are not satisfied with the outcome of the review of the restoration decision, you may then appeal to the tribunal.
HMRC or Border Force usually asks for a tribunal hearing to be postponed until condemnation proceedings have taken place. This is because challenging the legality of a seizure and reviewing a restoration decision are 2 separate things that cannot be dealt with at the same hearing. In particular, if you challenge the legality of a seizure and are successful, it may mean a tribunal hearing to decide restoration is no longer necessary.
The legality of a seizure is decided by the magistrates’ court at condemnation proceedings. An appeal against HMRC’s or Border Force’s decision about restoration is decided at a tribunal hearing. The tribunal has no authority to decide whether a seizure is lawful so that part is usually dealt with first by the magistrates’ court.
This does not infringe your human rights because you have clear ways to challenge the legality of the seizure and to ask for restoration. It is just that they are separate procedures that must be dealt with in different places.
Author Monty Jivraj is Head of Tax Investigations and Disputes and has worked with individuals and business in the UK for twenty years to help them understand tax laws and save millions of pounds. His business operations background allows him to quickly understand your business model and how the UK and EU tax laws apply to you.
Through extensive work with Her Majesty’s Revenue and Customs (HMRC), he can easily translate and advise on complex HMRC policies, public notices, decisions to deny input tax, fraud investigations and tax assessments.
At Silver Shemmings Ash, we provide seminars and training alongside our core activities in contentious and non-contentious matters. The purpose of these is to facilitate a greater knowledge and understanding of construction and property law. There remains a considerable lack of training in such areas for companies and this is an issue which we are looking to address
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