Statutory interest and repayment of overpaid excise duty

HMRC Reference:Notice 212 (August 2014) View Change History
 

Contents

Foreword

1. Introduction

1.1 What is this notice about?

1.2 Law

2. Overpaid excise duty

2.1 When can I reclaim excise duty I have overpaid to you?

2.2 Can I reclaim excise duty I have overpaid to a supplier?

2.3 What if my circumstances differ from those covered in 2.1 and 2.2?

3. Entitlement to statutory interest

3.1 When will I be entitled to statutory interest?

3.2 What is the rate of interest and how do you calculate it?

4. Statutory interest for undue delay

4.1 When may I qualify for statutory interest for undue delay?

4.2 How will you pay statutory interest for undue delay?

4.3 What if I disagree with the amount of statutory interest paid for undue delay?

4.4 What if I think I should have received statutory interest for undue delay?

5. Statutory Interest for an official error

5.1 When may I qualify for statutory interest for an official error?

5.2 How do I apply for repayment of duty and statutory interest for official error?

5.3 Time limits

6. Statutory Interest following a Tribunal Decision

6.1 When may I qualify for statutory interest following a tribunal decision?

7. Appeals

7.1 What if I disagree with your decision?

7.2 What if I choose to have a review but am not satisfied with the outcome?

Your rights and obligations

Do you have any comments?

 

Foreword

This notice cancels and replaces Notice 212 (March 2002).

1. Introduction

1.1 What is this notice about?

This notice explains:

  • how to claim a repayment if you have overpaid excise duty
  • when we will pay statutory interest automatically, because we have unduly delayed a repayment of excise duty to you
  • how to claim statutory interest when you have overpaid excise duty as a result of our error
  • when we will pay statutory interest following a tribunal decision
  • your rights of review and appeal if we refuse your claim for repayment of overpaid excise duty, or against non payment of statutory interest

This notice does not explain how to obtain a refund of excise duty when there is already a method in place for doing this (eg alcoholic ingredients relief, warehouse warrants, rejected imports).

You will find further information on how to obtain a refund of excise duty in the public notice for the specific excise regime.

This notice is only available through our website at www.hmrc.gov.uk.

The principles set out in this notice also apply to Air Passenger Duty.

1.2 Law

This notice does not have force of law but it explains how we interpret the relevant parts of:

  • Finance Act 2001 Schedule 3
  • Finance Act 1994 Sections 14-16 and Schedule 5
  • Customs and Excise Management Act 1979 (CEMA) Section 137A

2. Overpaid excise duty

2.1 When can I reclaim excise duty I have overpaid to you?

If you have paid an amount of duty to us, which was not due, we will repay that amount to you providing you:

  • make a satisfactory claim for the repayment (see paragraph 5.2)
  • make that claim within 4 years from the date the duty was overpaid
  • will not be unjustly enriched if we repay you

2.2 Can I reclaim excise duty I have overpaid to a supplier?

Yes. If, because of our error, you have paid duty on goods from your supplier when duty wasn’t due, we will repay that duty if it relates to:

  • spirits used for medical or scientific purposes
  • spirits used in art or manufacture
  • spirits contained in imported goods not for human consumption
  • oil delivered for home use for certain industrial purposes
  • light oil for use as furnace fuel
  • heavy oil used for a permitted purpose

But you will only be entitled to a repayment if:

  • you have previously requested authorisation or approval to receive excise goods that are relieved of duty, and
  • we have wrongly refused to give authorisation or approval, and
  • as a result, you have been forced to pay duty on goods, when no duty was due

2.3 What if my circumstances differ from those covered in 2.1 and 2.2?

This notice and the notices for individual excise regimes set out the most common situations leading to an entitlement to repayment of excise duty.

If they do not cover your particular circumstances, and you feel that you still have an entitlement to repayment, you should contact the Helpline.

3. Entitlement to statutory interest

3.1 When will I be entitled to statutory interest?

Statutory interest is a form of compensation we pay when:

  • we have unduly delayed a duty repayment claim (see section 4 of this notice)
  • you have overpaid duty as a result of our error (see paragraphs 2.1, 2.2 and section 5 of this notice)
  • you have paid, or given cash security for, an excise assessment which a VAT and Duties Tribunal has ruled was not due (see section 6 of this notice)

3.2 What is the rate of interest and how do you calculate it?

Interest is payable at the rate applicable under section 197 FA 1996. It is simple interest rates calculated daily as set out in the Air Passenger Duty and Other Indirect Taxes (Interest Rate) Regulations 1998. You can find further information about these rates from our website.

4. Statutory interest for undue delay

4.1 When may I qualify for statutory interest for undue delay?

You will qualify for statutory interest if we take longer than 30 calendar days to authorise a claim for repayment, or drawback of excise duty.

When we calculate the time taken to authorise the claim, the law allows us to deduct the time taken to:

  • make reasonable enquiries to make sure the claim is legitimate and accurate
  • correct errors or omissions on the claim

You will qualify for statutory interest if, after we have made allowable deductions there are still more than 30 calendar days between the date of receipt of your claim and the date we authorise repayment or drawback.

4.2 How will you pay statutory interest for undue delay?

We will pay statutory interest automatically at the same time as we pay your claim for repayment or drawback.

4.3 What if I disagree with the amount of statutory interest paid for undue delay?

You should take action in accordance with section 7 of this notice.

4.4 What if I think I should have received statutory interest for undue delay?

As explained in paragraph 4.2 statutory interest should be paid automatically if applicable.

However, if you think there has been undue delay in paying your claim but you have not received statutory interest, you should write to the person who dealt with your claim.. You should explain why you feel you are entitled to statutory interest. We will examine all the circumstances relating to the payment of your claim, including the deduction of any reasonable enquiry time, and will either:

  • pay statutory interest if appropriate
  • write to you and explain why statutory interest has not been paid

If you are not satisfied with our decision, you may take action in accordance with section 7 of this notice.

5. Statutory Interest for an official error

5.1 When may I qualify for statutory interest for an official error?

We will pay statutory interest for a repayment of duty where, because of our error, you either:

  • have overpaid excise duty directly to us
  • have been forced to pay duty on goods, when duty wasn’t due, in the circumstances described in paragraph 2.2
  • did not make a claim for repayment or drawback of excise duty to which you were entitled
  • have been refused a claim for repayment and it is later found that our decision was wrong

If you think you are entitled to interest in any of these circumstances you must make a claim it is not paid automatically.

5.2 How do I apply for repayment of duty and statutory interest for official error?

You can make a combined claim for both repayment of overpaid excise duty and statutory interest.

There is no specific form to make your claim on, but you must make it in writing and include the:

  • amount of the repayment claim
  • method used to calculate the claim
  • reason(s) why you think we have made an error
  • details of any documents you have to support your claim (we may ask to see these later)

We will not pay a claim for excise duty you have overpaid to us if that would result in you being unjustly enriched.

5.3 Time limits

You cannot claim interest if more than 4 years have elapsed since we authorised your claim for repayment of duty.

6. Statutory Interest following a Tribunal Decision

6.1 When may I qualify for statutory interest following a tribunal decision?

We will pay statutory interest if you have paid, or given cash security for, an excise assessment and the tax Tribunal finds that all or part of the amount paid or secured is not due.

7. Appeals

7.1 What if I disagree with your decision?

If you do not agree with our decision to either:

  • not repay overpaid excise duty to you
  • refuse or only partly allow interest

You can ask for it to be reviewed by an HMRC officer not previously involved in the matter. Your request must be made in writing to the person who issued the decision within 30 days of the date on the decision letter. Or you can appeal to an independent tax Tribunal within 30 days of the date on the decision letter.

7.2 What if I choose to have a review but am not satisfied with the outcome?

If you are not satisfied with the outcome of our review or we do not respond within 45 days from the date you requested the review you have another 30 days within which to appeal to an independent tax Tribunal.

Your rights and obligations

Your Charter explains what you can expect from us and what we expect from you. For more information, go to Your Charter.

Do you have any comments?

We would be pleased to receive any comments or suggestions you may have about this notice. Please write to:

HM Revenue and Customs
Central Policy
Tax Administration Advice
8th Floor Imperial Court
2/24 Exchange Street East
Liverpool
L2 3PQ

Please note this address is not for general enquiries, the helpline is 0300 200 3700.

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