It is well-known that when you come into the UK you are required to declare any goods subject to excise duty or other taxes, including any valuable purchases you have made; anything worth £390 or more should be declared and you are likely to be required to pay any duty or tax due on those goods or items, however you are also required to make a declaration if you are taking valuable items out of the country and a failure to declare them when you are leaving the UK may cause problems if you are intercepted by Border Force on your return.
My client was travelling out to a family wedding and took a quantity of jewellery with her, she stopped in Dubai en route and decided to purchase a new bracelet and to get some of her old jewellery re-sized and remodelled; the jeweller gave her a receipt showing the total weights and values of her “old” gold and the “new” gold and she paid for the difference (about £4,000) on her credit card. When she was intercepted at Heathrow on her return to the UK the officer saw her shiny “new” jewellery and the receipts showing the total value of the gold (£19,000) and seized the jewellery but was prepared to “restore” (i.e. return) it to her on payment of the duty on the stated value of £19,000, i.e. a payment of duty of about £4,000. My client refused to pay the duty and explained that the gold had only cost her £4,000 in the first place; she indicated that she would be willing to pay the duty on the £4,000-worth of new gold but not any duty on her “old” gold. The jewellery was seized and kept by the Border Force Officer.
My client challenged the officer’s decision to restore the jewellery only on payment of duty of £4,000 and the reviewing officer decided that the jewellery should not be restored/returned at all, finding that there had been a non-declaration and a deliberate attempt to evade the duty.
My client pursued appeals via the Magistrates Court (“condemnation” proceedings, which upheld the seizure and condemned the jewellery) and via the Tax Tribunal.
The Tax Tribunal found that my client (like most travellers and, initially, the reviewing officer) was unaware of the requirement to declare goods when leaving the UK and that she did not declare the £4,000-worth of new gold on her return, possibly because she was tired from her journey and as a result of some communication difficulties between her and the intercepting officer.
The Tribunal decided however that the majority of the jewellery had been owned for some years (the evidence included photographs of my client wearing the jewellery and pawn-shop receipts confirming the deposit of gold jewellery of similar weights on several occasions over a period of years) and that it was not proportionate for all the gold to be seized when the misdeclaration (on the way into the UK) of the “new” gold was inadvertent and related to a modest proportion of the total.
The Tribunal ordered that there should be a fresh decision whether to restore the jewellery on the basis that (i) only £4,000 worth of new gold was being brought into the UK, (ii) the misdeclaration was inadvertent rather than deliberate and (iii) the gold jewellery had been owned for many years and was of considerable sentimental value in excess of its intrinsic value.
Reliance was placed by Border Force on the fact that my client had presented the receipts for the gold when leaving Dubai and had subsequently received a refund on the VAT on the purchases (which appeared to relate to a purchase of about £12,000); my client explained that the person at the shop had said she needed to present those receipts or the Dubai Customs authority could (and would) seize the jewellery! The Tribunal accepted that my client was not responsible for the preparation of the receipts or the refund process and, in effect, had just done as she was told.
The issue of the proportionality of seizures, condemnation and forfeiture under the Customs and Excise Management Act 1979 (usually in relation to excise goods and the vehicles used to transport them) has been the subject of considerable litigation and comment; the present case confirms that such considerations apply in a wide range of situations.
Given the tighter and more wide-spread customs controls and checks now in place it is likely that there will be more seizures of goods being brought into the UK; travellers should be aware of the requirements to declare valuable items when leaving as well as when returning, though I suspect if everyone declared any watches, computers, jewellery, etc. worth more than £390 when leaving the country the queues into Dover would make life (and certainly travel) for the locals even more problematic!
Members of Becket Chambers are able to provide advice and assistance on a wide range of “customs-related” matters including the seizure, forfeiture and condemnation of goods, cash and vehicles; please contact the clerks via clerks@becket-chambers.co.uk or on 01227 786331 for further details.
