European Commission Demands UK Government Pay £20m Duty

08 December 2011

The EU Commission wants the UK Government to pay amounts due from certain imports of fresh garlic from China. If no action is taken in two months then the case is likely to be referred to the European Court of Justice (ECJ).

 

Between 2005 and 2006 HM Revenue & Customs (HMRC) erroneously allowed imports of fresh garlic from China to be imported as frozen garlic which attracted significantly lower duty rates. The error was picked up during an OLAF inspection in July 2006. The EU Commission considers that HMRC did not act with all due care in this matter and they are therefore liable for the loss from their own resources.

Customs duties are collected by Member States on behalf of the EU Commission with the collecting Member State keeping 25% to compensate it for its management. Failures to collect the full amount of customs duty leave the UK exchequer and as such the UK tax payer exposed. This may go some way to explaining the approach taken by HMRC when dealing with importers over disputed amounts of customs duty.

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