Bond House & The Federation of Technological Industries The European court of justice decisions have now been released, the FTI decision was released on 11 may 2006. Both of these decisions have re-enforced the need for effective due dilligence. If you need advice about your due dilligence then please contact our associated business The Due Dilligence Exchange Ltd. Public Notices Update Customs are re-writing and re-issuing many of their Public Notices. Make sure you obtain a copy of the updated Notice for your business. In the introduction to the Notice Customs will state what has changed so you can review whether or not you need to make any changes to your systems. A full list of Notices, Publications, forms and updates can be found on H M Customs & Excise website: www.hmce.gov.uk and click on "Forms and Publications". Mobile Phone Fraud This is highly topical as Customs are paying particular attention to businesses registering for VAT in the mobile phone and electronic chips sector. This is causing serious problems to legitimate VAT registered businesses operating in these industries. There are problems with VAT registered businesses importing mobile phones and computer chips from overseas and selling them in the UK without paying the VAT. The company then disappears or is using a hijacked VAT number to avoid paying the VAT charges on the sales. The goods are then sold through various businesses in the UK and are eventually exported back to the overseas supplier. Innocent businesses in the supply chain are then hit by Customs. They normally target the exporter as the exporter will be in the position of receiving repayments from Customs. Customs issue assessments disallowing VAT input tax and then offset the claims for repayment against the assessments. We can assist businesses in this position with the necessary appeals and legal action. Test cases have been referred to Europe and ultimately we expect Customs to lose this type of assessment in the Courts. We can then assist businesses affected with claims for compensation against Customs. Missing Traders in the Alcohol Industry There are also problems in the alcohol industry with what Customs term "missing traders". Customs have been issuing assessments to perfectly legitimate businesses to disallow input tax recovery from businesses Customs allege become "missing traders". If you have received such an assessment you should urgently consider taking professional advice and appealing the assessment to the VAT and Duties Tribunal. In our view these assessments are invalid in law and in every assessment of this nature where we have acted in appeals Customs have withdrawn the assessments in full before a hearing in the Tribunal and have paid our Clients costs. In the last appeal we won Customs withdrew an assessment of over £4 million. Customs & Excise 'U turn' Towards Cross Boarder Shoppers There has been a considerable amount of press coverage concerning seizures of alcohol, cigarettes, tobacco and vehicles from day trippers returning from Europe. This has resulted in a ‘U turn’ in the policies towards Cross Boarder Shoppers. Essentially the guidelines for the amount of cigarettes and tobacco allowed for personal consumption has been increased. Customs are also ‘backing down’ in other areas of Excise policy and have recently agreed to return seized alcoholic goods and to pay costs when threatened with Judicial Review action in the High Court. Road Haulage Industry Customs have increased their resources to investigate the misuse of road fuel. Customs often attack innocent businesses who may have inadvertently purchased laundered fuel. Customs seek to recover lost duty and VAT from the innocent third party. We can assist clients by advising on due diligence procedures for supplies of fuel and assist in defending clients who are subject to a criminal or civil investigation and tax assessments. We recently assisted a road haulier who was under criminal investigation by customs and negotiated a civil assessment reducing the duty assessment from £75,000 to £10,000.