Country Specific Updates: United Kingdom – Lexology


UK First Tier Tribunal (FTT) in BMW Shipping Agents Ltd. [2022] UKFTT 335 (TC), held customs officials responsible for paying import VAT, as the declarations were made on behalf of customs officials (not the importer).


BMW Shipping Agents Ltd. (BMW) in the UK was engaged by an overseas seller who was neither established nor VAT registered in the UK, to arrange for the goods to be cleared through UK customs and passed on to businesses registered in VAT in other EU countries.

BMW never owned the goods and was therefore not entitled to claim the import VAT exemption for subsequent delivery, which it had wrongly claimed when filing the customs declarations. As a result, a post-clearance claim note was issued to BMW for the payment of import VAT of over £3 million in 2016. BMW appealed this claim. The dispute was whether BMW or the foreign seller were liable for import VAT.

The UK FTT has decided that the decision as to who is liable for import VAT should be based on information given on customs declarations. Customs declarations indicated that BMW Agents completed the declarations in its own name and identified itself as the importer (instead of the foreign seller). As such, BMW was required to pay import VAT and the FTT rejected the company’s appeal.


Although the facts happened before Brexit, the principle of this decision is even more relevant after Brexit. This case highlights the importance of ensuring declarations are completed correctly, as an error/lack of care can result in an import VAT liability (even for customs agents) that otherwise would not be due.

Cancellation of the project for a VAT-free digital retail system for foreign visitors

The new UK Chancellor of the Exchequer has announced “a reversal of almost all tax measures set out in the 2022 growth plan that have not been legislated through parliament.” This includes the cancellation of the proposed VAT-free digital retail program for overseas visitors. For more details regarding the initial proposal for the VAT-free digital retail system in the 2022 Growth Plan, please see the link here.

HMRC has issued new guidance on secondary liability and joint and several liability for plastic packaging tax


HMRC has published a new tips to explain what is meant by subsidiary liability and joint and several liability in the context of the tax on plastic packaging, under parts 1 and 2 respectively of appendix 9 of the 2021 finance law.

Under these provisions, a business may be held liable by HMRC for unpaid tax on plastic packaging owed by another person or may be held jointly and severally liable for future tax owed by another person. The guidelines specify, for each type of responsibility:

  • where secondary or joint and several liability may arise;
  • how HMRC assesses liability and determines the amount due;
  • when HMRC may issue an opinion; and
  • the appeal mechanism against an opinion issued by HMRC.


For more information on plastic packaging tax in the UK, the risk of secondary or joint and several liability and how you can mitigate this risk, please refer to our previous article. here.

Upper Tribunal decided in Northumbria Healthcare NHS Foundation Trust [2022] UKUT 00267 that NHS Trust did not engage in the provision of car parks under a special legal regime


The question in this case was whether a supplier was acting as a taxable person when he rented parking spaces in the car parks of his hospitals. The taxpayer had argued that it was acting as a public authority under Article 13 PVD (as implemented by Article 41A VAT). The Upper Tribunal therefore had to decide:

  • if the deliveries of parking spaces were made under a “special legal regime” applicable to the taxpayer and not applicable to private economic operators; and if it’s the case
  • whether treating the taxpayer as a non-taxable person would lead to a significant distortion of competition.

The Upper Tribunal found that there was no error of law in the First-tier Tribunal’s conclusion that the taxpayer had failed to provide a parking space under a special legal regime. Furthermore, although not determinative of the present appeal, the Upper Tribunal held that the First-tier Tribunal had not erred in concluding that treating the taxpayer as non-taxable would lead to a significant distortion of competition.


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