Upper Tier Tax Tribunal judgement on Inward Processing Relief

On 28 March, in Thyssenkrupp Materials (UK) Ltd v R & C Commrs [2024] CTC 502, the Upper Tribunal allowed an appeal from the First Tier Tribunal against a demand for customs duty and import VAT issued by HMRC on the basis the appellant was not entitled to inward processing relief claimed in respect of components used in manufacturing aircraft.

The Upper Tribunal agreed with the appellants that the lower Tribunal was wrong to find that errors in bills of discharge (BoDs) and data mismatches between Bills of Discharge (BoDs) and HMRC’s Management Support System (MSS) gave rise to customs debts and did so even if the error or discrepancy was de minimis or immaterial.

The grounds of appeal were:

1.       The FTT was wrong to find that TK’s BoDs were required to contain accurate particulars that reconciled the MSS and BoD data without further investigation, and that breach of that “requirement” gave rise to a customs debt.

2.       The FTT erred in interpreting the decision of the Court of Justice of the European Union in Döhler Neuenkirchen (Case C-262/10) to mean that a single error in one row in a BoD gives rise to liability to a customs debt on all the goods covered by the BoD.

3.       The FTT erred in holding that any error or discrepancy in a BoD gives rise to a customs debt, even if the error is de minimis or immaterial.

This decision is a welcome return of certainty to the UK’s IP regime.

4 Eyes Ltd can advise on your business on customs processes, including IP. Please call us if this is relevant to you.