In an historic ruling the European Court of Justice has ruled in favour of the taxpayer to the effect that overpaid customs duty can be recovered.

The brief circumstances were that a UK company had inadvertently failed to separately show on import declarations a buying commission as charged by an overseas buying agent for the services of representing the company concerned in the purchase of goods from a Far Eastern manufacturer. This meant that duty was taken on the buying commission figure even though buying commission is a non-dutiable cost. Customs and Excise had refused to repay the duty overpaid claiming that no correction was possible because the buying commission had not been declared at importation ; it had thus in effect become dutiable.

Bell Davies, the leading firm of customs duty consultants, fought the case on behalf of the taxpayer through the UK Tribunal process and on to the European Court of Justice in Luxembourg. The Court has, on 20 October, released its verdict, which agrees with the Bell Davies submission. The ruling is the effect that an agreed non-dutiable cost cannot become dutiable simply because the taxpayer completed the import form incorrectly; rather a non-dutiable cost must remain non-dutiable

As a consequence many millions of pounds are potentially repayable throughout the European Union.

This means that every importer now has the opportunity to re-examine their affairs to see if any such comparable duty cost has been overpaid .The past rulings from Customs which refused repayment requests in the circumstances of this case can no longer be sustained. Indeed there are costs other than buying commission, which could now be considered for repayment.