United Kingdom VAT & Duties Tribunals (Customs) Decisions

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Cite as: [2007] UKVAT(Customs) C245, [2007] UKVAT(Customs) C00245

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Frederick George Shearer v Revenue & Customs [2007] UKSPC (15 October 2007)

C00245

DUTY – Transfer of Residence relief claimed on import of a car – Appellant a citizen of USA who moved to UK in 1977 – Car manufactured in 2004/5 imported to UK in 2005 – Public Notice 3 relied on by Appellant – Customs and Excise Duties (Personal Relief for Goods) Order 1992 applied – Appeal dismissed

LONDON TRIBUNAL CENTRE

FREDERICK GEORGE SHEARER Appellant

and –

THE COMMISSIONERS FOR HER MAJESTY'S REVENUE & CUSTOMS Respondents

Tribunal: MISS J C GORT (Chairman)

MR P D DAVDA FCA

Sitting in public in London on 3 September 2007

The Appellant in person

Mr David Mancknell of counsel, instructed by the Solicitor's Office, for the Respondents

© CROWN COPYRIGHT 2007

DECISION

This is an appeal against a decision contained in a letter dated 27 March 2007 by which the Commissioners on review confirmed a decision to refuse "Transfer of Residence" relief to the Appellant ("Mr Shearer") on the importation of a private motor car.

There were two decisions prior to the review decision of 27 March, namely one contained in a letter dated 10 January 2007 and a second decision contained in a letter dated 1 February 2007. This second decision was also a decision on review, by it the Commissioners confirmed an assessment issued on 10 January by which Mr Shearer became liable to pay outstanding import charges of £6,257.

The Appellant attached a letter with his notice of appeal setting out the reasons for the appeal which in summary were that he fully met the conditions set out in Public Notice 3 and he had fulfilled all the published criteria.

The background

Mr Shearer has been a resident in the United Kingdom since July 1977. He came from San Francisco in California where he has a brother and other family members. He originally had come to the United Kingdom in 1973 and he returned to San Francisco in June 1976. In August 1977 he returned to the United Kingdom having found permanent employment in London. Ever since that time he and his wife have been resident in the United Kingdom but not domiciled here. In September 2005 he imported a motor vehicle from the USA and declared it for `temporary importation'. (Further particulars of this matter are set out below.) On its importation he applied for Temporary Importation relief, but on 4 January 2007 he submitted an application for `Transfer of Residence' relief on form C104A. It is the dismissal of that application and the confirmation of that dismissal on review, which is the subject matter of this appeal.

The evidence

We were given a bundle of documents by the Respondents and Mr Shearer himself gave evidence to us. We find the following facts. In November 2004 on a visit to the United States Mr Shearer found in San Jose, California, a Cheverolet Corvette which he persuaded his brother, a resident of California, to purchase on his behalf. Mr Shearer's brother became the registered owner, but Mr Shearer himself was the keeper of the vehicle which entailed him renting a garage and paying the necessary insurance. Mr Shearer used the car for almost a month, and drove nearly 2,000 miles in it.

Mr Shearer had been made redundant from his job in London in January 1999 and thereafter remained in the United Kingdom where he studied for an MA in modern history which he was awarded in October 2001. At the time of the purchase in 2004, and continuing into 2005, Mr Shearer was hoping that he would be accepted as a Post Graduate student at University College London. In August 2005 he was informed that he would not be admitted there for further studies. Because he wished to continue his studies, in the autumn of 2005 he was encouraged to approach the University of East Anglia, which he did, and at the time of the hearing of this appeal he was expecting to start work as a part-time PhD student in January 2008. In the meantime he had been employed in the United Kingdom, we were not told the nature of that employment. It is Mr Shearer's intention to return to California once his studies here are completed.

Following the importation of the car and the initial application for relief on the basis that it was a temporary importation, there was considerable correspondence between Mr Shearer and the Commissioners all of which is contained in the bundle before us. It was accepted by Mr Shearer that his initial application for Temporary Import relief was ill-founded.

The application for Transfer of Residence relief was initially refused, in the letter of 10 January 2007, on the basis that Mr Shearer had not possessed and used the vehicle for at least six months outside the EU before it was imported. A subsequent letter from the Commissioners informed Mr Shearer that he had failed to obtain the relief as he was not the registered owner of the vehicle, which was a condition of the scheme. The second refusal letter, that of 1 February 2007, was on the basis that Mr Shearer had failed to provide sufficient evidence to prove that any of the pre-import conditions as set out in Public Notice 3. At the hearing it was accepted by Mr Mancknell that Public Notice 3 did not represent the applicable law.

In the review letter of 27 March 2007 the reviewing officer stated inter alia that the application had been refused on the grounds that Mr Shearer had not lived outside the EU for a continuous period of more than twelve months. In that review letter the appropriate legislation is set out. The reasons given on the review of the decision are that the law made clear that eligibility for relief stated that the importer must have lived outside the EU for a period of not less than twelve months. It did allow for vehicles to be imported up to twelve months after the owner has transferred his place of residence, and this can be extended in certain circumstances, however, as Mr Shearer had transferred his place of residence from the USA to the United Kingdom thirty years earlier, and there was no exceptional circumstance, the decision was upheld. It was also considered by the reviewing officer that Mr Shearer had not owned and used the vehicle outside the EU for a period of six months. This was because Mr Shearer's brother owned the vehicle and it had not been in Mr Shearer's possession prior to the transfer of residence.

The legislation

Customs and Excise Duties (Personal Reliefs for Goods etc) Order 1992 Part IV.

"11(1) Subject to the provisions of this Part, a person entering the United Kingdom shall not be required to pay any duty or tax chargeable in respect of property imported into the UK on condition that –

(a) he has been normally resident in a third country for a continuous period of at least twelve months;

(b) he intends to become normally resident in the UK;

(c) the property is intended for his personal or household use in the UK; and

(e) the property is declared for relief –

(i) not earlier than six months before the date on which he becomes normally resident in the UK, and

(ii) not later than twelve months following that date.

Council Regulation 918/83

Chapter 1

Relief from Import Duty

Article 3

The relief shall be limited to personal property which –

(a) except in special cases justified by the circumstances, has been in the possession of and, in the case of non-consumable goods, used by the person concerned at his former normal place of residence for a minimum of six months before the date on which he ceases to have his normal place of residence in the third country of departure;

(b) is intended to be used for the same purpose at his new normal place of residence.

In addition, Member States may make relief conditional upon such property having borne, either in the country of origin or in the country of departure, the customs and/or fiscal charges to which it is normally liable.

Article 4

Relief may be granted only to persons whose normal place of residence has been outside the [Customs territory of the Community] for a continuous period of at east 12 months.

However, the competent authorities may grant exceptions to the rule in the first paragraph provided that the intention of the person concerned was clearly to reside outside the [Customs territory of the Community] for a continuous period of at least 12 months.

Extra Statutory Concessions

6 VAT and excise duties: Personal reliefs for goods permanently imported from third countries.

Where personal belongings otherwise qualify for relief under Article 11 of the Customs and Excise Duties (Personal Reliefs for Goods Permanently Imported) Order 1992 save only that the property has not been possessed and used for the specified period, then just as relief can be granted from customs duties as "special cases justified by the circumstances" under Article 3 of Council Regulation 918/83, similar consideration shall apply in respect of VAT and excise duties and relief may be granted accordingly."

The Respondents' case

It was accepted by the Commissioners that the car had been in Mr Shearer's possession and used by him in the USA prior to its importation, but the USA was not the country in which he was normally resident, and he had not been resident there for a period of at least six months prior to the importation, thus he failed provision 1(c) of section 11 of the 1992 Order. It was also submitted that he failed section 11(1)(e)(ii) in that the vehicle had not been declared for relief not later than twelve months following the date on which Mr Shearer had become normally resident in the United Kingdom.

Mr Mancknell submitted that the Transfer of Residence provisions were there for people who were coming in from outside the European Community and who were moving to the United Kingdom and wished to bring their possessions with them. They were not there to enable long-time residents to bring in products duty free. In the present case there never could be exceptional circumstances because the car was manufactured in 2004 or 2005 and was not in existence at the time of Mr Shearer's transfer of residence in 1977.

Prior to the hearing Mr Shearer had not technically abandoned his application for Temporary Importation relief, and therefore the Commissioners had appended a supplemental statement of case dealing with that issue.

The Appellant's case

Mr Shearer's case was simply that he was entitled to rely on section 5.1 of Public Notice 3 and he fulfilled all its requirements. The only issue related to 5.4 of Notice 3 which asks the question whether belongings or a vehicle may be imported after a person's arrival and the Notice says: "Yes, but they should normally arrive no more than twelve months after the date you move or return to the EU. We will waive this condition if you can provide us with a reasonable explanation for the delay." It was Mr Shearer's case that not only did this allow the Commissioners to allow his application, but, by his letter of 10 January Mr Cook, the officer of the Commissioners who wrote that letter, had in fact waived that condition. His argument for stating this was that in his letter to the Commissioners of 4 January Mr Shearer had set out the fact that he had never availed himself of his right to import the vehicle under the Transfer of Residence regulations, that the vehicle would not be here permanently, and would be used for pleasure only and would not be sold. In that letter he asked that he be allowed to have the vehicle here as part of his personal effects. By not referring to that issue in his letter of 10 January 2007 Mr Shearer contended that the condition had in effect been waived, provided Mr Shearer could demonstrate both that he possessed the car and had used it for at least six months outside the EU before its importation.

Reasons for decision

We find the Appellant's argument to be entirely without merit. Whilst he may to some extent have been misled by the Public Notice in this case, and we make no finding as to whether or not that was the case, it is the fact that this matter is governed by the legislation as set out above and not the Public Notice and we accept the Respondents' arguments as to why Mr Shearer does not comply with the requirements of the legislation.

We have not dealt with the issue of Temporary Importation in this decision, no review decision on that matter was before us, the review letter with which we are concerned dealt only with the issue of Transfer of Residence relief, and it is not appropriate for us to deal with it at this time. However should Mr Shearer feel any inclination to take that matter further, we suggest he reads carefully the Respondents' skeleton argument on the issue of Temporary Importation.

For the above reasons this appeal is dismissed. No order for costs.

MISS J C GORT

CHAIRMAN

RELEASED: 15 October 2007

LON 2007/7034