David George Ellis t/a D E International Transport v Commissioners for Her Majesty's Revenue and Customs

Decision date: 16 March 2011

Neutral citation: [2011] UKFTT 181 (TC)

Overall AI summary confidence: high

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Short overview

This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.

AI confidence in this short overview: high

This case concerns an HMRC excise assessment of £462,319 against Mr David George Ellis as the guarantor shown on 21 AADs for duty‑suspended wine movements to France. The Tribunal found the AAD stamps were forged, the goods did not arrive, and that Mr Ellis’s conduct (issuing invoices and failing to investigate or prevent misuse) amounted to implied authorisation of the guarantees; the assessment was upheld except in relation to seven movements for which no authorisation was found. The appeal was dismissed save for removal of those seven transactions; no costs were awarded.

Ratio decidendi

This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.

AI confidence in this ratio decidendi summary: high

Where duty‑suspended goods do not arrive and the place of irregularity cannot be determined, the guarantor shown on the AAD may be held liable for the excise duty under the statutory scheme; actual dishonesty is not required if the guarantor’s conduct (for example invoicing for movements and failing to investigate or prevent misuse) amounts to implied authorisation of the guarantee. A notification allowing a reasonable period to produce evidence before assessment satisfies the guarantor’s rights of defence.

Obiter dicta

This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.

AI confidence in this obiter dicta summary: medium

The judgment indicates (obiter) that movement guarantees are susceptible to abuse and that parties holding guarantees are expected to undertake reasonable commercial due diligence and to cancel or protest use where misuse is suspected. It also notes HMRC may pursue others jointly and severally under the DSMEG Regulations without absolving the guarantor of primary liability.

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