- Original Poster
- #1
Hi
HMRC recently has issued me with a huge amount for unpaid Import duties & vat on past imports from China. It all started in June 2023 with one of our container being seized and taken from Flx port to their storing premises. They concluded that the wrong commodity codes were used by our clearing Agents on the Customs Entry which should have been different ones that have an extra applicable Anti Dumping Duty Rate of 48.5% . We have been using the same reputable clearing agent for the past 8 years who have been established for over 100 years. They admitted in their email which was forwarded to HMRC that they had always applied only 2 commodity codes to our goods for the past few years, and these were deemed acceptable by HMRC.
This is an excerpted paragraph from our agent’s email to me about the usage of these wrong commodity codes:
“Any entries prior to this we can assume are incorrect, as you weren’t paying anti-Dumping Duty prior to the container being seized. We were using the commodity
Codes, which I believed were correct at the time and the containers were being cleared by HMRC without any issues. But following the seizure of the container in June, we can assume that the codes used on some of the previous entries have been incorrect. Hence the fact that we now complete your entries in a different way.”
We made our appeal to HMRC showing that this was an honest mistake on the part of our agent and that there was no bad faith on our part with intent to avoid Anti-dumping duties. There was also no plausible reason to question our clearing agent when the same 2 commodity codes were being accepted on all our imports by HMRC which was never questioned over the past 6 years. The container was eventually released after almost 3 months with a restoration fee and the Anti-dumping duty that was owing on this container and with no penalty charge. I would just like to highlight here that in our appeal to HMRC for the restoration of the container, it was clearly understood that we only became aware of the application of the incorrect commodity codes by our clearing agent at the time of the seizure and therefore all imports from before this had had the same 2 erroneous commodity codes on their entries. However, after this hurdle we made every endeavour and worked closely with our clearing agent to make sure that this mistake was never repeated again.
However moving forward from June 2023 with the seized container incident, almost one year later we received a letter from HMRC (Compliance Check)who were making inquiries into our past imports dating back to 3 years They wanted all the information on 10 imports, (7 imports before the seizure and 3 imports after the seizure). The information was supplied to them and 5 months later they wrote back slapping us with a huge bill of £30,000, representing unpaid anti dumping duties on 5 previous containers. Two of the imports date back to more than 3 years which HMRC did not include in their demand and the 3 imports after the seizure , all the duties, anti-dumping duties and vat were paid correctly on these. We were given the right to appeal, which we did but the original decision was upheld.
We have now been served with a C18 demand for £30,000 for unpaid Anti Dumping Duties and VAT on those 5 entries This demand is for settlement within 30 days but has also given the right to appeal again and reviewed by an independent HMRC official from another office. As the sole Director of the company and now past 70 years of age, I thought going through the Covid period and the lengthy 3 months seizure of our container would be truly the end of the Storm. Further to this, our family online business is currently going through a difficult time with sales going down to extremely unprecedented levels which is making me think about insolvency preparation.
At this juncture, I would like to think there is still some hope where HMRC can reduce this bill significantly or even write it off.
Is there any exception to the rule in my case which can be used as mitigation against this demand?
I have been informed that at the time of the imports, if HMRC did not notify me of the unpaid anti-dumping duties and vat charges, then it can be argued that i was unaware of the liabilities and not given the opportunity to pay. Therefore, it is unreasonable to be penalised with a sudden payment demand for 5 imports which will seriously cripple my business.
I have also been informed that HMRC has a responsibility to inform me of these liabilities within a reasonable time frame. Can one year down the line ( after the seizure) be considered a reasonable time frame especially as they were already aware that the 2 wrong commodity codes had always been applied to all my previous imports. What surprised me, is after so many years using these 2 wrong commodity codes which both my agent and HMRC could not detect, yet in spite of this obvious shared blame, I as the importer is having to accept the full blame which in my opinion is so unfair.
Furthermore, as HMRC failed to detect these mistakes for such a long time span , can it be argued that they also have a share in the blame and it would again be unreasonable for my company to be penalised with a payment demand for 5 imports.
Thank you for taking the time to read my case. I would greatly appreciate any advice, feedback, or your own experience that can help my position in this matter.
Best Wishes
MOS
HMRC recently has issued me with a huge amount for unpaid Import duties & vat on past imports from China. It all started in June 2023 with one of our container being seized and taken from Flx port to their storing premises. They concluded that the wrong commodity codes were used by our clearing Agents on the Customs Entry which should have been different ones that have an extra applicable Anti Dumping Duty Rate of 48.5% . We have been using the same reputable clearing agent for the past 8 years who have been established for over 100 years. They admitted in their email which was forwarded to HMRC that they had always applied only 2 commodity codes to our goods for the past few years, and these were deemed acceptable by HMRC.
This is an excerpted paragraph from our agent’s email to me about the usage of these wrong commodity codes:
“Any entries prior to this we can assume are incorrect, as you weren’t paying anti-Dumping Duty prior to the container being seized. We were using the commodity
Codes, which I believed were correct at the time and the containers were being cleared by HMRC without any issues. But following the seizure of the container in June, we can assume that the codes used on some of the previous entries have been incorrect. Hence the fact that we now complete your entries in a different way.”
We made our appeal to HMRC showing that this was an honest mistake on the part of our agent and that there was no bad faith on our part with intent to avoid Anti-dumping duties. There was also no plausible reason to question our clearing agent when the same 2 commodity codes were being accepted on all our imports by HMRC which was never questioned over the past 6 years. The container was eventually released after almost 3 months with a restoration fee and the Anti-dumping duty that was owing on this container and with no penalty charge. I would just like to highlight here that in our appeal to HMRC for the restoration of the container, it was clearly understood that we only became aware of the application of the incorrect commodity codes by our clearing agent at the time of the seizure and therefore all imports from before this had had the same 2 erroneous commodity codes on their entries. However, after this hurdle we made every endeavour and worked closely with our clearing agent to make sure that this mistake was never repeated again.
However moving forward from June 2023 with the seized container incident, almost one year later we received a letter from HMRC (Compliance Check)who were making inquiries into our past imports dating back to 3 years They wanted all the information on 10 imports, (7 imports before the seizure and 3 imports after the seizure). The information was supplied to them and 5 months later they wrote back slapping us with a huge bill of £30,000, representing unpaid anti dumping duties on 5 previous containers. Two of the imports date back to more than 3 years which HMRC did not include in their demand and the 3 imports after the seizure , all the duties, anti-dumping duties and vat were paid correctly on these. We were given the right to appeal, which we did but the original decision was upheld.
We have now been served with a C18 demand for £30,000 for unpaid Anti Dumping Duties and VAT on those 5 entries This demand is for settlement within 30 days but has also given the right to appeal again and reviewed by an independent HMRC official from another office. As the sole Director of the company and now past 70 years of age, I thought going through the Covid period and the lengthy 3 months seizure of our container would be truly the end of the Storm. Further to this, our family online business is currently going through a difficult time with sales going down to extremely unprecedented levels which is making me think about insolvency preparation.
At this juncture, I would like to think there is still some hope where HMRC can reduce this bill significantly or even write it off.
Is there any exception to the rule in my case which can be used as mitigation against this demand?
I have been informed that at the time of the imports, if HMRC did not notify me of the unpaid anti-dumping duties and vat charges, then it can be argued that i was unaware of the liabilities and not given the opportunity to pay. Therefore, it is unreasonable to be penalised with a sudden payment demand for 5 imports which will seriously cripple my business.
I have also been informed that HMRC has a responsibility to inform me of these liabilities within a reasonable time frame. Can one year down the line ( after the seizure) be considered a reasonable time frame especially as they were already aware that the 2 wrong commodity codes had always been applied to all my previous imports. What surprised me, is after so many years using these 2 wrong commodity codes which both my agent and HMRC could not detect, yet in spite of this obvious shared blame, I as the importer is having to accept the full blame which in my opinion is so unfair.
Furthermore, as HMRC failed to detect these mistakes for such a long time span , can it be argued that they also have a share in the blame and it would again be unreasonable for my company to be penalised with a payment demand for 5 imports.
Thank you for taking the time to read my case. I would greatly appreciate any advice, feedback, or your own experience that can help my position in this matter.
Best Wishes
MOS
there is someone on this forum who has expertise in this area, and comes along with their thoughts.
