When importing goods into the UK, traders are required to account for any applicable customs duty and import VAT (collectively “Duties“) on import unless they can utilise a customs special procedure to delay or reduce payment of these amounts. Customs special procedures include the Inward Processing (“IP“) regime which allows traders to suspend the Duties while the imported goods are subject to repair or further manufacturing.

Where a trader utilises IP, they are required to submit Bills of Discharge (“BOD“) to inform HMRC of the final destination of the goods i.e., re-exported (in which case no Duties are payable); or entry into free circulation (where a trader will then account for the applicable Duties)) to discharge their liability. These BOD are expected to align with HMRC’s records of a trader’s import and export activity (previously the Management Support System (“MSS“)) data.

Compliance errors in the operation of IP can lead to traders incurring significant duty liability. This risk was recently seen in the dispute between Thyssenkrupp Materials (UK) Ltd (“Thyssenkrupp“) and HMRC on the treatment of errors contained in BODs. HMRC held that any error, including a minor or immaterial error, or any mismatch between a BOD and information held by HMRC in the MSS data may invalidate the entire BOD in which those errors are contained and give rise to a customs debt for all entries covered by the BOD. This was upheld by the First-tier Tribunal Tax Chamber (“FTT“) on 30 November 2022.

On 28 March 2024, the UK’s Upper Tribunal of the Tax and Chancery Chamber (“UT“) published its decision (see here) finding in favour of Thyssenkrupp.

Summary of the case

The FTT’s decision was made on the basis of the Court of Justice of the European Union’s (“CJEU“) judgement in Döhler Neuenkirchen GmbH v Hauptzollamt Oldenburg (Case C-262/10) (“Döhler“) where failure to submit a BOD by the submission deadline gave rise to liability to a customs debt for all entries captured by the BOD.

In the appeal, the UT found that the FTT had erred in interpreting Döhler. The UT argued that there was a fundamental difference between a failure to submit a BOD at all within the required period (as in Döhler) and a small number of errors in a BOD submitted on time. Errors which had “no significant effect” on the customs procedure, or which were easily rectifiable using other documentation, did not invalidate the entire BOD.

Additionally, where there were errors of “significant effect”, a customs debt should only be incurred on those specific entries.

Key takeaways from the UT’s decision

While the UT’s decision may still be appealed by HMRC and therefore this may not be the end of this matter, we note the following key points made by the UT:

  • Both minor errors in BOD and more significant errors do not invalidate the entire BOD and therefore do not result in Duties being payable for all entries covered under that BOD.
  • The UT also considered errors which were easily rectifiable using other documentation to be errors that are of “no significant effect”. The principle of “no significant effect” under which minor errors can be corrected such that these do not give rise to a customs debt, should be interpreted pragmatically.
  • Record keeping requirements should not be conflated with the requirements of a BOD.
  • There is a fundamental difference between the failure to submit a BOD at all within the required time period (which was the case in Döhler, hence triggering a customs duty liability), and the submission of a BOD containing a small number of errors. If a delay in submitting a BOD is trivial and not the result of obvious negligence, then it is not likely to lead to a customs debt across the entirety of the BOD (since this delay has “no significant effect” on the operation of the customs procedure).

Although this decision does not negate the importance of BOD to be accurate, and crucially, submitted on time, it is expected that this ruling will result in a less aggressive approach from HMRC when reviewing BOD and considering whether Duties should be payable. This will particularly be the case for BOD containing a small number of errors or omissions.


Jennifer is a Partner and head of Baker McKenzie's Customs & Excise Practice in London, and co-head of Baker McKenzie EMEA Customs group.


Alexandra is an associate in the London Competition, Trade and Foreign Investment practice. Her focus is on international trade, particularly in customs compliance issues. Alexandra advises clients on import matters, including customs valuation and rules of origin. She has worked with clients on customs investigations and valuation disputes.