When and Why?
There are many reasons that HMRC or Border Force might seize goods that are imported into the UK but in the manufacturing and engineering sector it is most likely to be a disagreement about the HS or Commodity Code that was used.
Commodity codes, also known as HS codes after the Harmonised System, are an 8 or 10 digit number that tells everyone involved in the movement of goods;
- What they are
- What duties should be paid
- Whether a quota applies
- If they should have a licence
- What the labelling requirements are
For some goods, especially machinery or electronics a small difference in the HS code can significantly affect the amount of import duty that’s payable so it’s unsurprising that HMRC scrutinise imports carefully to ensure the correct duty is paid.
It’s also important for domestic manufacturers that products made overseas don’t enter the UK market without paying the correct duty. A wide range of goods and materials from countries with cheap labour and lower costs have anti-dumping and countervailing duties imposed in addition to import duty to make sure British manufacturers aren’t disadvantaged.
The second common reason that goods are seized is that when the consignment was inspected, the contents of the container didn’t match the description or quantity listed on the customs declaration. Often, this is an innocent mistake because the supplier or the importer didn’t understand the level of detail required. There have been instances of goods worth tens of thousands of pounds seized because the customs declaration didn’t include some very low value spare parts that had been packed with the main product to save space. The spare parts didn’t even attract any import duty but, because they hadn’t been itemised on the customs declaration, the whole consignment was pulled. Quite apart from being a legal obligation, it is in the importer’s best interest to provide full and accurate information about the goods to avoid expensive delays and unnecessary stress.
If your goods are seized you’ll receive a NOTICE OF SEIZURE UNDER CUSTOMS AND EXCISE MANAGEMENT ACT 1979 from HMRC. This will explain in detail the grounds for the seizure of the goods. If HMRC disagrees with the HS code they will tell you what they think is the correct one. If they have found items not listed on the customs declaration it will give the quantity and description so everything is clear.
There are now two options. If you accept that HMRC or Border Force had reason to seize your goods as explained in the Notice of Seizure you can ask for their return. This is known as a Restoration Request and may require payment of a fine and / or unpaid duty.
If you believe it was illegal for HMRC or Border Force to seize your goods and that you didn’t break the rules, for example you brought in alcohol or tobacco for your personal use, you must issue a Notice of Claim.
Notice of Claim
If you don’t agree HMRC or Border Force had legitimate reasons to seize your goods you should issue a Notice of Claim which means you will go to court to argue your case. If you win you will get your things back unless they’ve already been disposed of in which instance you’ll be awarded compensation. If you don’t win you may have to pay court costs and your things will not be returned.
The Notice of Claim should include;
- the seizure reference number on the notice you got from customs
- your name and address
- a list of the things you think customs was wrong to seize – include details, for example quantities and brands
- proof of ownership if your vehicle was seized
- why you think it was illegal for customs to seize your things
Your notice of claim must be received by HMRC or Border Force within a month of your things being seized. Your things are usually kept until your claim is decided, unless they’re perishable, for example they’re food.
You can make a ‘restoration request even if you agree customs was right to take them. It must be done in writing (email is fine) and;
- be written in English
- include your full name and address
- quote any reference number shown on the seizure information notice or notice of seizure
- explain why you think the thing should be restored to you, giving the full circumstances, and enclosing any available evidence to support your request
- include proof of ownership of the thing (such as purchase receipts)
HMRC or Border Force will normally acknowledge your Restoration Request within 10 working days of receiving it.
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. Perishable goods (including tobacco, beer and all food products) will be disposed of as quickly as possible. Non-perishable things (such as vehicles and spirits) are usually disposed of 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.
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).
It is permissible to pursue both options at the same time by challenging the legality of the seizure and asking for the seized thing to be returned in the meantime. It is important to understand that challenging the legality of the seizure and asking for restoration are two completely separate processes. They may be dealt with at the same time but in separate ways. They cannot be combined because magistrates’ courts and tribunals have different areas of authority.
The International Trade Consultancy has represented several clients to successfully claim back their goods from HMRC. For more information about the process and costs email email@example.com or call +44(0)7966514511