HMAG30041 - Registration and approval: temporary approval

Temporary approvals where a decision to refuse or revoke is under appeal

Temporary approval arrangements were introduced by the Finance Act 2021 Part 4 section 131 which changed section 16 of FA (Finance Act) 1994. These apply where an approval decision to either refuse or revoke the approval is under review (section 15c or 15E of FA 1994) or where the decision is now under appeal at a Tribunal (section 16 of FA 1994). Its purpose is to allow a legal person or place to be registered/approved on a temporary basis until a review decision has been reached or the tribunal has been heard. Its intention is to prevent a decision, if in the business’s favour, having no real value. For example, where the business was unable to trade and would be unlikely to recover.

Where temporary approval is granted, it temporarily replaces or is a substitute for the original approval which has been refused or revoked. The approval commences on the day the application for temporary approval is granted and is subject to any reasonable and proportionate conditions or restrictions we may wish to impose to protect revenue, provided the business is able to continue to trade. It applies to the following holding and movement approvals:

  • excise warehouse approvals under CEMA s92
  • WOWGR warehouse-keeper approvals under CEMA s100G.

Granting temporary approval

Temporary approval should normally be granted where the prospects of the decision going in the trader’s favour are high and where the business would be unable to continue without the approval. It should not be granted where it can be demonstrated to a strong balance of probability standard that doing so would place UK (United Kingdom) revenue at an unacceptable risk. As with our wider approval policy consideration should also be given to placing conditions and restrictions on the approval to limit any risk identified, provided these do not in themselves prevent the business from trading. Please see the conditions section in this guidance. The purpose of the temporary approval is to allow the business to trade pending a decision on the original refusal or revocation being reached.  The temporary approval, where it is applied, would be in place until the appeal decision is reached, where the decision is in the business’s favour the approval would become a standard one.

The person who has received a decision to have their approval refused or revoked may request temporary approval by writing to HMRC. Where the request is sent to either the review team or original decision maker the National Registration Unit should also be made aware of it.

To decide whether it would be appropriate to grant temporary approval, it is necessary to consider:  

  • If the person is eligible - to be eligible they must have received a decision to revoke or refuse their original approval and this decision must be under review or appeal,
  • the prospect of the review or appeal in respect of the approval decision being in the business’s favour,  
  • any alternative steps available to, and taken by, the business to protect its position pending the final decision in the appeal, and
  • whether the business has acted quickly and efficiently in seeking the review or progressing the appeal action.

Temporary approval should only be granted where:

  • the business is eligible and can demonstrate that if temporary approval were not granted, the review or appeal decision, if in the trader’s favour, would be worthless as the business would be unable to continue, and
  • risks to the revenue are manageable.

When a temporary approval expires

If the decision is under review, the temporary approval expires if the approval decision to revoke or refuse is cancelled. At the point of cancellation, the original substantive approval should start or resume.

If the approval decision is upheld on a review, the temporary approval expires on the last day an appeal could normally be brought against that decision unless a further appeal is brought in, in which case, the temporary approval expires on the day on which the appeal is finally determined. The possibility of an appeal being brought out of time with permission should be ignored.

Revocation of a Temporary approval and applying further conditions and restrictions

A temporary approval may be revoked or varied with conditions or restrictions, where a change in circumstances justifies doing so. For example, if we have compelling evidence that the use of the approval represents a significant risk to the revenue, or, despite the approval, the circumstances of the business have changed and as a result the approval is no longer required.

Notifying the Business concerning Temporary approval decisions

The decision maker must notify the business in writing of any decision to grant or revoke a temporary approval or to vary the conditions or restrictions to which such approval is subject. Copies of any approval document should be shared with the Excise Processing Team responsible for registration.