Hundreds of UK steel companies are urgently seeking to resolve an ongoing dispute with tax authority HMRC after being retroactively billed millions of pounds for safeguard duties, Kallanish learns.
The issue has been highlighted by steel service centre industry association NASS in its end of year statement, written by its director general, Ian Darby.
“As you may or may not be aware, NASS/[International Steel Trade Association] ISTA/[British Stainless Steel Association] BSSA and [Confederation of British Metalforming] CBM have all been supporting many of their members in a £41 million two-year later, late claim for duty payable on such safeguards. The fight is still going on and we are still hopeful that something can be done,” Darby says.
Various instances occurred where companies imported product for clearance in a quarter that had allocation remaining, but these tonnes were transferred into the following quarter before the material was cleared. This resulted in importers being charged a duty even though the allocation had not been fully exhausted for that quarter, only transferred forward.
Darby tells Kallanish that some of the quotas had indeed been extinguished, and that the industry fully supports the need for the safeguards. But these claims were received some two years after the paperwork was seen and cleared by HMRC using its Customs Handling of Import and Export Freight (CHIEF) system. The companies being asked to pay the duty will have already traded the product on at the original price on the customs paperwork, assuming that the duty was not payable.
HMRC is only allowing claims back into the final open quarter even though there is still plenty of quota available, he adds.
Darby has been working to highlight and resolve the issue for more than a year.
The four industry groups recently met with steel importers and Weightmans Solicitors to tackle HMRC’s demands regarding the DTY override code due to difficulties with the CHIEF system.
The CHIEF system was replaced by the Customs Declaration Service (CDS) in late 2022 and into 2023.
Darby and Weightmans are now calling for others to come forward to join the group action, with an email sent out to members. A group action against HMRC’s claims will provide a stronger amount of collective evidence, enable those involved to share legal costs, and highlight the widespread issue, he adds.
“At various times since mid-2022 HMRC have contacted individual companies and made demands for safeguarding duty and import VAT. In some instances, this has been almost three years after the imports were cleared for circulation,” Darby wrote in the email seen by Kallanish.
The issue was also recently raised during a debate on business confidence held in parliament on 12 December.
Member of Parliament Sarah Coombes said: “Steel manufacturing is a vital West Midlands industry, but business confidence is being dented by retrospective charging of steel safeguarding duties by HMRC. Companies affected in her West Bromwich constituency and elsewhere feel these were unfairly and wrongly imposed on them during the chaotic Brexit transition period.”
“They tried to work with the last government but got nowhere on it. Given the importance of the steel sector to British industry, would the minister work with the treasury to resolve this issue and make sure these vital businesses are protected from hefty bills which should never have been charged in the first place?” she asked.
Jonathan Reynolds, MP and Secretary of State for Business and Trade, said he could “understand, in terms of the sums of money involved, why that is such a substantial issue for businesses in her constituency. The issue does relate to the duties that were charged at a time of significant political uncertainty; while it’s a treasury issue and relates to taxation, I can promise her we’ll get her the meeting she needs and work with her to ensure she’s getting the answers she is requesting for her constituents.”
Darby adds in his end of year statement that a new round of hot rolled coil safeguards came into place on 1 October. It took 40 days for the processes to come into place to register the imports. This highlights the problems being faced since Brexit, he says.
He adds that some steel processors are still waiting for HMRC to give them access to the new quota, while Tata Steel has allegedly already imported over 1.3 million tonnes of HRC.
Carrie Bone UK
