Stop. Freeze. Seizure under the Customs and Excise Management Act.

Rhys was recently instructed to challenge the decision of the UK Border Force to seize three high value watches from a client at Stanstead Airport. The client was simply visiting the UK on his return home, however, goods totalling £75,000 were seized and their return was refused.

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In order to be liable to forfeiture pursuant to Section 78 (and 139) of the Customs and Excise Management Act 1979, the goods must be “commercial” pursuant to The Travellers’ Allowances Order 1994. This means that the goods must be “commercial” as indicated by the nature and quantity of the goods.

There are two routes of challenge. The first of these is to apply to the Magistrates Court on the basis that the seizure of the goods was unlawful. This must be done within one month of the seizure having taken place. Upon goods being seized, an individual will be provided with a Notice 12A which explains the options available to apply to set aside the seizure. If legality is not challenged within the time period, the legality of the seizure the things are duly condemned as forfeit to the Crown by the passage of time under paragraph 5 of schedule 3 of CEMA and any goods are confirmed as having been improperly imported.

Having had an opportunity of raising the lawfulness of the seizure in the Magistrates’ Court, one does not have a second chance of doing so at Tribunal or Statutory Review because the Tribunal does not have jurisdiction to consider it.

The only route of challenge once the period has passed is to apply for a restoration pursuant to Section 152 (b) of the Customs & Excise Management Act 1979. A Review will then be carried out in accordance with the provisions of sections 14 and 15 of the Finance Act 1994 which allows a reviewing officer to uphold, vary or withdraw the original decision.

The general policy for seized goods is that they should not be restored. They will not be restored where they have been mis-declared, concealed or there has been a deliberate attempt to evade duty. However, each case is treated on its own merits and there may be exceptional circumstances for which discretion may be used to depart from the policy.

It is necessary to take into account all relevant factors and disregard those factors which are not relevant as was set out Witowski v The Commissioners of HM Revenue & Customs. In light of this, it is important to ensure that individuals who have had goods seized are represented by those with experience of the rules surrounding seizure of goods.

The case of E Rider Ltd v The Commissioners for Her Majesty’s Revenue and Customs [2021] UKFTT 0209 (TC) provides that the decision not to return property must be proportionate. In the Rider case it was held that a relevant consideration can be the duties that fell due on the items and the question of knowledge on the part of the individual who had possession of the goods. Where an individual is found not to have acted dishonestly it will often be disproportionate to order forfeiture.

One argument pursued by Rhys was that it was disproportionate to forfeit the entire value of the goods where the only taxable portion of the value would be VAT. This would apply to all goods purchased and brought into the UK that are subject to VAT alone and is an argument that should be deployed in almost all cases. It may also be possible to offer to pay the duties that were due (if they were due) in order to secure the return of the goods.

It is important to be aware that where goods were simply entering the UK before exiting the jurisdiction, there are no taxes that fall due. It is for this reason that Rhys is well placed to assist with a detailed knowledge of the application of customs taxes upon items being temporarily possessed in the UK rather than technically ‘imported’.

The key thing to be aware of is that this is a complicated area of law. Those who have goods seized upon entering the country should be reluctant to simply surrender those goods. By acting quickly and allowing for a challenge to legality and a subsequent application to restore goods, those who have goods seized can ensure the proper return of items. This is best achieved through the instruction of a specialist legal team at an early stage.