Fatima Jewellers Limited v The Commissioners for HMRC

Fatima Jewellers Limited v The Commissioners for HMRC

Fatima Jewellers was not authorised to operate Outward Processing Relief and had no legitimate expectation under EU or domestic law to pay Customs Duty only on processing costs; thus, Customs Duty is payable on the full value of the imported jewellery. However, the requirements of Regulation 126 VATR were satisfied, so import VAT is only payable on the processing costs, transport costs, and Customs Duty, not the full value of the jewellery.

Parties
Appellant: Fatima Jewellers Limited; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
11 September 2024
Procedural Posture
Tax Appeal / First Tier Tribunal Judgment
Outcome
Appeal allowed in part
Legal Topics
Customs Duty, Import VAT, Outward Processing Relief, Legitimate Expectation, Remission of Duty
Tax Law Customs Law European Union Law Customs Duty Import VAT Outward Processing Relief Legitimate Expectation Remission of Duty

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Parties

Fatima Jewellers Limited

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Judgment

Legal Issues

  1. 1 Whether Customs Duty and import VAT are payable only on processing costs or on the full value of imported gold jewellery
  2. 2 Whether the appellant had a legitimate expectation under EU or domestic law to pay duty/VAT only on processing costs
  3. 3 Whether remission of Customs Duty is available under Articles 116–120 UCC

Ratio Decidendi

Fatima Jewellers was not authorised to operate Outward Processing Relief and had no legitimate expectation under EU or domestic law to pay Customs Duty only on processing costs; thus, Customs Duty is payable on the full value of the imported jewellery. However, the requirements of Regulation 126 VATR were satisfied, so import VAT is only payable on the processing costs, transport costs, and Customs Duty, not the full value of the jewellery.

Court Disposition

Appeal allowed in part

Orders

  • Customs Duty of £151,427.95 is payable in full by Fatima Jewellers Limited.
  • Import VAT is to be limited to processing costs, transport costs, and Customs Duty as per Regulation 126 VATR; parties to agree the amount, with liberty to apply to the Tribunal if agreement cannot be reached.