Barbourne Brook has advised import businesses to see the recent £1.4m HMRC demand issued to Fatima Jewellers Limited as a warning and to take action to review and verify the reliefs they have in place when sending goods overseas for processing.

The jeweller had been exporting gold to Dubai and importing gold jewellery for many years, when HMRC issued a post-clearance demand note in 2020 for demanding £151,427.95 for Customs Duty and £1,241,709.48 for import VAT in respect of 18 importations of gold jewellery.  The appealed was based around the jeweller’s belief that the duty and VAT was only due on the processing costs incurred outside the UK and not on the full value of the gold jewellery imported.

Adam Wood, Head of Commercial at Barbourne Brook, commented:

“Where a business in importing goods without the correct relief in place and they face a demand it is then based on customs valuation rules.  These rules do not allow businesses to offset the value of the goods sent out against what was sent back.  The value of good exported can only be excluded using specific relief that must be pre-authorised.

“Fatima Jewellers argued that they had legitimate expectations of the amount of duty and tax they would be liable for, based on letters written to them by HMRC and the Border Force, but information in these letters would only be admissible if based on full disclosure of information, which may be complex.”

A cargo ship
A customs consultancy meeting

Barbourne Brook supports international businesses in avoiding the pitfall of errors on duty declarations, which can snowball dramatically.

Consultants can competently spot the need for relief and gain the necessary approvals.

Where requests for advice are made to HMRC, Barbourne Brook ensures that the request is framed in a way to get an agreement that can be relied on and stands up in court.

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