CUSTOMS & EXCISE DUTY civil evasion penalty cigarettes in excess of allowance walked with customs officer to the green channel whether engaged in any conduct involving dishonesty for the purpose of evading any duty no appellant not require to give oral evidence due to vulnerability appeal allowed
DECISION
introduction
- Mr Markos appeals against the decision by the Respondents ('HMRC') to issue a joint Customs Civil Evasion Penalty in the sum of £358 and Excise Civil Evasion Penalty in the sum of £1,312, totalling the amount of £1,670.
- The penalties were issued on 14 April 2021 pursuant to section 8(1) Finance Act 1994 and section 25(1) Finance Act 2003 following the seizure of cigarettes at Stansted Airport on 16 November 2019.
- The point at issue is whether Mr Markos engaged in any conduct involving dishonesty for the purpose of evading any duties, thereby satisfying the statutory requirements for the issue of the penalties.
- The Tribunal's decision, allowing the appeal, was given orally at the end of the hearing. HMRC requested full reasons for that decision, which are set out below.
appellant's circumstances
- Mr Markos lodged his appeal with the Tribunal on 11 August 2021. In correspondence to the Tribunal regarding case management matters, at a hearing on 15 June 2023 to consider an application to exclude evidence and at a hearing on 10 June 2024 which was adjourned because various issues prevented Mr Markos from being able to fully prepare for the hearing, Mr Markos explained to the Tribunal the serious personal difficulties impacting on his ability to deal with these proceedings. These difficulties concerned his caring responsibilities, subsequent bereavement and complications with funeral arrangements, health problems, accommodation and financial issues, as well as practical difficulties with travel, accessing resources and keeping documents.
- Having considered these circumstances, the requirement for the Tribunal to take every reasonable step to facilitate Mr Markos's participation in the proceedings and representations made by the parties, I issued directions to the effect that I would retain case management of the appeal and hear the substantive appeal, all communications would be sent to Mr Markos by email and post, the Tribunal would sit from 11.30am to 5.30pm and the appeal hearing would be listed for 2 days, with the intention to finish within 1 day if possible.
grounds of appeal
- The full grounds of appeal provided by Mr Markos are as follows:
"(1) In there letter dated 18th February 2021, HM Revenue & Customs have made vague accusations of dishonesty for the period between 16th November 2018 and 18th February 2021 (2 1/4 year period).
In there letter dated 5th March 2021, HM Revenue & Customs have repeated a further attack on my character with vague accusations of dishonesty, and alleging goods seized between 16th November 2018 and 18th February 2021.
However despite this, in my letter dated 21st April 2021, I co-operated and indicated that I would be pleased to help HM Revenue & Customs upon receipt of specific details. No details were forthcoming concerning what they were specifically refering too, and I was left confused on how I could have, or can help them further.
They have not produced a shred of evidence to support there allegations for this period because they are totally untrue.
Likewise, in the alternative my fundamental right of silence cannot be construed in any negative sense.
HM Revenue & Customs have been engaged in abuse of the process and abuse of power. Because the legislation was not intended to support fishing expeditions under duress, totally without bases or evidence.
Under the Finance Act 2003 Section 29(1) and Finance Act 1994 8(4), I have co-operated fully in the fact that there allegations are false.
(2) On 16th November 2019 at Stansted Airport, I was detained by the Border Force officer even before passport control and was under his power and control.
I did not voluntarily enter any channel, I answered all his questions truthfully and there was no dishonesty or deception on my part.
The HM Revenue & Customs seems to be in possession of evidence to support this position, because Border Force have confirmed this course of events in previous correspondence, and I have not seen any evidence to the contrary.
Again, I have co-operated fully with HM Revenue & Customs and answered there questions truthfully in accordance with the legislation, and there was no dishonesty on my part.
In addition to numerous correspondence with the Border Force, the further detail of events of that day was contained in my letter addressed to HM Revenue & Customs dated 27th July 2021.
(3) Without prejudice to the above, when I travel abroad (and also on 16th November 2019), I only take cabin luggage which only has limited space for the minimum of clothing, hygiene essentials, ect.
There is evidence to support this, which I would be pleased to bring to the court.
On this bases, commonsense seems to suggest that the HM Revenue & Customs figures and calculations as a bases for there penalty cannot possibly be correct.
(4) These proceedings have been escalated far beyond the possible subject matter. It is contrary to the principle of proportunality.
In addition, this point is especially relevant in view of the national Coronavirus pandemic emergency, where only essential work is carried out. This matter seems to be a goose chase fishing exercise.
I also respectfully point out that HM Revenue & Customs letter dated 9th July 2021 was not received until 2 weeks later."
HMRC's case
- HMRC's case is that Mr Markos arrived at Stansted Airport on a flight from Kiev and entered the green channel, indicating that he had nothing to declare. A search of his baggage revealed that he was in possession of dutiable goods exceeding the personal allowance limits when travelling outside of the European Union (namely 4,460 cigarettes, which is more than 22 times over the personal allowance of 200 cigarettes). HMRC submit that had Mr Markos not been intercepted, he would have avoided paying customs and excise duties totalling £1,670, that the quantity of the goods exceeded the personal allowance greatly and his 'evidential knowledge' of the personal allowances supports that this can be considered to be a deliberate and dishonest act. They contend that it is not credible that Mr Markos believed such a vast quantity of goods could be imported without declaring them.
- HMRC further contend that Mr Markos was aware he had goods in excess of the allowance and made a dishonest attempt to import the cigarettes and tobacco without paying the appropriate duty. They assert that airport signage should have alerted Mr Markos to the appropriate channel, he freely entered the green channel and he was not pressurised into it or prevented from entering another channel. Once stopped by Border Force officers, Mr Markos stated that he did not know what the allowances were and indicated that this was not his first trip abroad, as he travels to Kiev to see his girlfriend whenever his finances allowed. HMRC submit that, in addition to the signage, it is reasonable to expect a person to check the allowances before importing a significant quantity of cigarettes and that where a person has exceeded their personal allowance, it is HMRC's standard practice to seize the goods concerned and issue a civil evasion penalty.
- Regarding HMRC's procedures, they submit that Mr Markos refused to sign for but was issued with a seizure information notice BOR162 (warning letter) which explained that the seizure was without prejudice to any other action that HMRC may take including issuing a penalty. Mr Markos was also provided with guidance as to how to challenge the legality of the seizure (Public Notice 12A). On 18 February 2021, HMRC wrote to inform Mr Markos of an ongoing investigation into their customs, import VAT and excise duty affairs and Mr Markos was asked to disclose any information in relation to the seizure that may assist the investigation. The letter explained that cooperation with the investigation could reduce any penalties that may become due. HMRC submit that they therefore gave Mr Markos the opportunity to co-operate before making the decision to issue a penalty and, although a reminder was sent on 5 March 2021, it was only after the penalty was imposed on 14 April 2021 that Mr Markos made contact.
- HMRC further submit that Mr Markos confirmed his position that the penalty was disputed on 10 May 2021, stating that he had not voluntarily entered the green channel and did not make any false statements when he was stopped. The decision was upheld on 9 July 2021 following a statutory review and Mr Markos agreed to co-operate once further information had been provided to him. HMRC submit that they duly sent the details, although the appeal states that Mr Markos was confused because the information lacked specific details. HMRC contend that their response was sufficient and argue that had Mr Markos intended to co-operate, he would have contacted HMRC for clarification. They also contend that, although the appeal infers that the baggage did not have the capacity to hold 4,460 cigarettes, Mr Markos had the opportunity to dispute this when the seizure notice, which states the amount, was handed to him and that it is difficult to understand why HMRC's letters did not prompt Mr Markos to share this information.
- HMRC submit that they were unable to reduce the penalty because Mr Markos had not co-operated or provided any disclosure. Therefore, the penalty was correctly raised and calculated at 100% of the potential lost duty on the basis of the lowest price of cigarettes at the time of the seizure.
legislation
- The relevant statutory provisions have been set out in full at Annex 1 to this decision.
- The statute provides that, in any case where any person engages in any conduct for the purpose of evading any duty, and their conduct involves dishonesty, that person shall be liable to a penalty of an amount equal to the amount of duty evaded or sought to be evaded.
burden of proof
- The burden of proving that a person acted dishonestly for the purposes of this appeal rests with HMRC.
- I do not accept HMRC's submission, made in their statement of case, that in the more serious civil cases, such as where dishonesty has to be proved, the nature, quality and weight of evidence to satisfy the civil standard of proof is commensurably increased. I consider the standard of proof in this case to be the simple balance of probabilities (see Re B (Children) 2009 AC 11 at [70]).
Dishonesty
- I agree with HMRC's submission that the test to adopt in determining whether dishonesty is established is that set out by the Supreme Court in Ivey v Genting, Casinos (UK) Limited t/a Crockfords [2017] UKSC at [74]:
"When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual's knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest."
- I must therefore consider what was Mr Markos's genuinely held belief as to the facts and whether his conduct was dishonest according to normally accepted standards of behaviour.
evidence
- The bundle of documents for the hearing comprised of the pleadings, directions, lists of documents, correspondence between the parties, legal authorities and legislation.
- The bundle also contained witness statements with supporting documents for HMRC's officers Paul Barker and Lee Crozier, as well as a witness statement provided by Mr Markos, his hand-written notes and three photographs. Two of the photographs appeared to show different buildings in Ukraine with European Union flags outside and one photograph showed a travel bag next to a measuring tape showing approximately 44 centimetres and a pair of shoes.
- All witnesses were present at the hearing.
Officer Crozier
- The statement given by HMRC Officer Crozier referred to his work on the Customs International Trade and Excise Post Detection Audit team, and his decision to issue the penalties in question following the referral received by his team on 22 November 2019 from UK Border Force regarding a seizure of cigarettes at Stansted Airport. As none of these matters were in dispute, Officer Crozier was not required to give oral evidence.
Officer Barker
- I heard oral evidence from HMRC Officer Barker. His witness statement, which he adopted as his evidence-in-chief, is set out in full below:
"I, Paul Barker, of the UK Border Force, WILL SAY as follows: -
1. I am a designated general Customs official and a Customs revenue official, pursuant to sections 3 and 11 of the Borders, Citizenship & Immigration Act 2009 respectively. I am currently based at Stansted Airport.
2. On the 16 November 2019 I was on duty at Stansted Airport. At 21.17 I was introduced to Mr. Nicholas Markos, date of birth [date] travelling on a GBR passport [number] from Ukraine, Kiev on flight FR3678.
3. I walked with him from the Primary Control Point to the Customs Channels. Mr. Nicholas Markos elected the Green channel which has signage as Nothing to Declare.
4. I asked Mr. Nicholas Markos a series of questions and established that: he lived in the UK, was travelling alone and had been to the Ukraine to see his girlfriend who lived in Kiev. Mr. Nicholas Markos confirmed he visited her as much as his finances allowed. A record of the conversation is exhibited as PB1.
5. The allowance for travel from a non-EU country was 200 cigarettes. My search of the Appellant's baggage revealed 4,460 mixed brand cigarettes and therefore Mr Nicholas Markos had attempted to import goods 22.3 times over the personal allowance for tobacco goods.
6. At 21.33 I seized the 4,460 mixed brand cigarettes, under S78 (4) of the Customs and Excise Management Act 1979 because the amount held was over the allowance for tobacco products.
7. I served BOR156 and BOR162 (exhibit PB2) on Mr. Nicholas Markos, who declined to sign the forms but confirmed his understanding.
8. I also gave Mr Nicholas Markos Notice 12A which provides guidance as to what you can do when goods are seized.
9. Mr. Nicholas Markos departed the Customs Channels at 21.40.
10. The 4,460 cigarettes were sealed with [reference] and placed in a secure lock up facility.
Statement of Truth
I believe that the facts stated in this witness statement are true. I understand that proceedings for contempt of court may be brought against anyone who makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth.
Signed: P Barker
Dated: 05/02/2022"
- Officer Barker's relevant notebook pages contained brief notes which reflect the contents of his witness statement. The notes also refer to the conversation he had with Mr Markos as follows:
"Is this your baggage?
Yes
Do you know what is in your bag?
Yes
Did you purchase anything in the Ukraine?
Cigarettes
Are you aware of your allowance for tobacco products from a non-EU country?
No
How many tobacco products do you have?
I don't know
Are you aware that it is illegal to import drugs, weapons, firearms?
Yes"
- When cross-examined by Mr Markos, Officer Barker said, regarding the walk from the Primary Control Point to the Customs Channels, he could not recall exactly what was said and he could not recall if he told Mr Markos to "follow me" or if he said "come on" when Mr Markos started to fall back. He could not recall if he asked Mr Markos twice if he had any hold luggage, and when asked if Mr Markos said "where are we going?" and he replied "we'll see", he said that "doesn't sound like what I would say but I don't remember".
- When asked by Mr Markos if he had authority over him, Officer Barker said "I had authority. You were not under arrest or in handcuffs but under my control in the controlled area."
- When asked how did he know that Mr Markos elected the green channel when there were no questions or notes about entering the channel, he replied that Mr Markos "went through the green". When it was suggested to him that this was under his control he said "Yes, under my authority". When asked what did Mr Markos physically do, he said "I can only talk to my note you entered the channel. I cannot say what you would have done if not intercepted."
- Officer Barker was asked whether he remembers searching the bag. He replied that he did. Mr Markos suggested that he makes thousands of seizures so would not remember. Officer Barker disagreed explaining that because this seizure was appealed, he was more familiar with the case. He said there are not many appeals against cigarette seizures so this was relatively unique. Mr Markos asked Officer Barker to confirm that the bag which was searched was shown in the photograph. Officer Barker said he could not confirm if that was the bag as he could not remember any details regarding the search itself, including what was taken out of the bag. He said what he remembers is the interaction with Mr Markos. He did not recall if he handed the cigarettes to a colleague to put in a bag or if his colleague counted them. When asked how the number was calculated, Officer Barker said that initial notes were made at the interception but he could not recall where. He confirmed that his notes presented at Tribunal were made some time after Mr Markos had left the airport.
Mr Markos
- The witness statement submitted by Mr Markos is set out in full below:
"I Mr Nicholas Markos of c/o address
I make this statement in support of the above said matter and say as follows:-
(1) In middle of November 2019, I had a vacation in Ukraine, during which I visited my Girlfriend there. On 16th November 2019, I was returning back to the United Kingdom via Kiev Borispol Airport.
(2) As a consequence of costs and convenience, I travel light and had one small cabin bag and a very small vinyl bag for inflight food.
(3) Security at Kiev Borispol Airport as such is very high, where the hand luggage is put through the X-ray scanner, both on entrance to the airport building and also before Passport Control where I noticed many bags are inspected.
(4) At this occasion, I was asked whether I had any cigarettes, and I confirmed the fact that I had a small amount in my bag alongside my clothing and dancing shoes, ect. The authorities requested to see my Passport and then momentarily took me to a side office, where some sort of official requested permission to look into my bag.
Which I granted and the official looked through my clothing and cigarettes.
The official seemed to be telling me that I was in excess of the cigarette customs transport limit for what he told me was a non EEC country. I tried to explain that I was not aware that Ukraine was not a member of the European Union because there are very many European Union Flags in the city of Kiev and also rows of these flags to the left of the Main Terminal near the shuttle Train station connecting the city.
(5) The official took a note of my Passport number and boarding pass and seem to inform me that he would be forwarding the information to the authorities at my Stansted London Airport destination. I was then allowed to continue my journey.
(6) At this point, I was very upset, however I remember concluding that there was nothing further for me to do except sort the matter out at Customs Control at Stansted Airport concerning any Excise Duty, ect payable.
(7) On arrival at London Stansted Passport Control, I was immediately detained at the Control Barrier by a lady Border Guard/Police Officer who took my Passport and then took me past 2-3 other Officers, where I heard one of them state;
"He is the one".
I was then taken to some sort of holding pen immediately to the right of the Passport Control Barriers, where I was told to stay until further notice.
There was 3 people there.
After about 10-15 minutes, a male Border Guard/Police Officer arrived and instructed me to follow him, which I obviously complied with.
I asked him repeatedly from behind; "So where are we going?"
"He replied; you will see".
He then asked me at least twice; "Have you got any hold luggage"?
I repeatedly replied; "No! Not at all!".
(8) I was under the power and control of this Border Guard/Police Officer and compelled to follow his instructions and was then taken to some sort of inspection room (which I believe was behind the Red Tunnel, but I cannot be certain).
I certainly did not indicate to anybody a preference for any specific tunnel.
(9) There was various discussions as indicated in my notes refered to in point (12).
He then asked me about my bag and am I carrying any cigarettes.
I replied; "Yes, I have some cigarettes"
He then emptied all of the contents of my bag including the cigarettes and searched my bag and even had me take out the cigarette packet from my pocket, under threat of a body search.
(10) I requested that I be allowed to have my Statutory Allowance, but Border Guard/Police Officer denied this, by saying; "We keep all the cigarettes".
(11) After I was permitted to leave, I felt extreamly agreeved and angry concerning the way that I was treated, with regard to what I consider a relatively small amount of cigarettes.
(12) As a consequence of this, I felt that I was subjected to an arbitrary abuse of proper process and I had not been fairly treated. I felt that my cigarettes had been stolen, including my statutory allowance.
Whilst I was on the Bus returning home, I started to make rough notes. I continued with the notes after I arrived home and well into the night and morning while they were fresh in my mind.
(13) I attach hereto a copy of the notes made on 16th & 17th November 2019.
refered to in point (12) above (2 pages).
(Marked: NM 1).
Statement of Truth
I believe that the facts stated in this witness statement are true. I understand that proceedings for contempt of court may be brought against anyone who makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth.
Signed: Nicholas Markos
Dated: 7th March 2022
...
All fitted in one polythene bag!!!"
- Mr Markos's hand-written notes reflect the contents of his witness statement.
- In his letter to Border Force on 9 December 2019, Mr Markos stated that "this was a small amount of cigarettes that was in my cabin bag and also on my person", and in his letter to HMRC dated 27 July 2021, Mr Markos stated: "I was under the mistaken impression that Ukraine was in the European Union (Kiev and especially the Airport, misleadingly has flying at many locations numerous European Union flags suggesting this)". He also stated: "you have made reference to signage at baggage collection. Please take further note, that I never take cargo luggage when travelling and only carry cabin baggage, the dimensions of which (must not exceed 55cm x 40cm x 20cm) and is for the very minimum of clothing, plus a very small bag for food. This is strictly enforced by Ryanair at boarding. I still have a copy of the boarding pass." A copy of the boarding pass, reflecting these baggage details, was included in the hearing bundle.
Vulnerability
- There is no general definition of 'vulnerability' under the law. I am however required to consider the vulnerability of parties and witnesses and whether a person is likely to suffer distress in giving evidence because of their own circumstances or those relating to the case, including whether the party or witness has or may have a physical or mental health condition, the issues arising in the proceedings, whether a matter is contentious, and the domestic circumstances of the party or witness.
- On the basis of the matters set out at [5] and [6] above, I found Mr Markos to be a vulnerable adult. In determining how to assess his evidence fairly, I am mindful that flexibility is key, as is his welfare. I am also mindful of the overriding objective to deal with cases fairly and justly under Rule 2 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.
- Having determined that the burden of proof rests with HMRC in this case, having heard the witness evidence presented by HMRC, and having considered the submissions made and the documentary evidence adduced by both parties, I did not require Mr Markos to give oral evidence during the hearing because I considered his welfare was likely to be prejudiced by doing so and that this was not necessary to enable the fair hearing of the case (see AM (Afghanistan) v Secretary of State for the Home Department [2017] EWCA Civ 1123 at [31]).
findings of fact
- Having considered all of the evidence adduced, on a balance of probabilities, I make the following findings of fact:
(1) Mr Markos was in possession of cigarettes which exceeded his personal allowance; I do not consider this fact to be in dispute and this finding is supported by Mr Markos's witness statement, which refers to a customs official in Kiev telling him that following a search of his bag.
(2) Mr Markos was not carrying 4,460 cigarettes; I make this finding on the basis that Mr Markos's boarding pass supports his contention that his bag did not have the capacity to hold 4,460 cigarettes and, in the absence of any evidence from Officer Barker regarding the details relating to his search and the recording of the amount, I find it to be unlikely that the restricted size of such a bag could have accommodated 22 cartons of 200 cigarettes and therefore more likely than not that the number of cigarettes had been incorrectly recorded. I do not consider that I should make a different finding, as HMRC contend, because Mr Markos did not take the opportunity to dispute this amount when the seizure notice was handed to him, taking into consideration that my finding is based on the boarding pass information regarding the size of the bag and that Mr Markos refers in his statement to being angry about the way he was treated at that time. Nor do I consider the letters sent to Mr Markos did not prompt him to share information about his bag when, in his letter to Border Force on 9 December 2019, Mr Markos stated that "this was a small amount of cigarettes that was in my cabin bag and also on my person".
(3) Mr Markos genuinely believed the amount of cigarettes in his possession was below his personal allowance limit because he believed he was travelling from a country within the European Union. I make this finding on the basis that the unchallenged photographic evidence showing European Union flags in Ukraine supports Mr Markos's contention that this was his genuinely held belief. I do not accept HMRC's submission that it is not credible that Mr Markos believed such a vast quantity of goods could be imported without declaring them because I have found that Mr Markos was not carrying the vast quantity of goods HMRC contend.
(4) When Mr Markos was informed by customs officials in Kiev that the cigarettes in his possession exceeded his personal allowance limit, it is my finding in the specific circumstances of this case, on the basis of Mr Markos's witness statement and in the absence of any evidence to the contrary, that Mr Markos intended to deal with the duties on arrival at Stansted Airport.
(5) Mr Markos did not elect to enter the green channel at Stansted Airport; I make this finding on the basis that Officer Barker accepted when giving his evidence that Mr Markos was under his authority or control whilst entering the Customs Channels. I am not satisfied that the evidence demonstrates that had Mr Markos not been intercepted he would have avoided paying customs and excise duties, as HMRC contend. Officer Barker's evidence was that he could not say what Mr Markos would have done if not intercepted.
conduct which involves dishonesty
- HMRC's case is that Mr Markos freely entered the green channel, indicating that he had nothing to declare, when he was in possession of dutiable goods exceeding the personal allowance limits, and that this amounts to conduct which involves dishonesty for the purpose of evading any duty. Officer Barker accepted when giving his evidence, and I have found, that Mr Markos was under his authority or control whilst entering the Customs Channels. I am therefore not satisfied, in these circumstances, that Mr Markos freely elected to enter the green channel, which is the premise of HMRC's case.
- Having determined Mr Markos's genuinely held belief as to the facts, namely that he believed the cigarettes in his possession were below his personal allowance limit because he believed he was travelling from a country within the European Union and, when he was informed otherwise by customs officials in Kiev, that he intended to deal with the duties on arrival at Stansted Airport, I must now consider whether his conduct was dishonest according to normally accepted standards of behaviour.
- I have found, on a balance of probabilities and in the specific circumstances of this case, that no indication was made by Mr Markos that he had nothing to declare by choosing to enter the green channel or otherwise. I do not consider his behaviour, namely walking under the authority of Officer Barker from the Primary Control Point to the Customs Channels and stating that he had cigarettes when first asked, was dishonest according to normally accepted standards of behaviour.
- I do not consider this behaviour amounts to conduct which involves dishonesty for the purpose of evading any duty and accordingly find that Mr Markos is not liable to a civil evasion penalty under section 8(1) Finance Act 1994 or under section 25(1) Finance Act 2003.
conclusion
- For the reasons set out above, I allow this appeal.
Right to apply for permission to appeal
- This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to "Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)" which accompanies and forms part of this decision notice.
KIM SUKUL
TRIBUNAL JUDGE
Release date: 03rd APRIL 2025
Annex 1
LEGISLATION
Finance Act 1994, Sections 8, 12 and 13
8 Penalty for evasion of excise duty
(1) Subject to the following provisions of this section, in any case where
(a) any person engages in any conduct for the purpose of evading any duty of
excise, and
(b) his conduct involves dishonesty (whether or not such as to give rise to any
criminal liability), that person shall be liable to a penalty of an amount equal to the
amount of duty evaded or, as the case may be, sought to be evaded.
(
)
(4) Where a person is liable to a penalty under this section
(a) the Commissioners or, on appeal, an appeal tribunal may reduce the penalty to
such amount (including nil) as they think proper; and
(b) an appeal tribunal, on an appeal relating to a penalty reduced by the
Commissioners under this subsection, may cancel the whole or any part of the
reduction made by the Commissioners.
(5) Neither of the following matters shall be a matter which the Commissioners or any
appeal tribunal shall be entitled to take into account in exercising their powers under
subsection (4) above, that is to say
a) the insufficiency of the funds available to any person for paying any duty of
excise or for paying the amount of the penalty;
b) the fact that there has, in the case in question or in that case taken with any other
cases, been no or no significant loss of duty.
12 Assessments to excise duty
(1A) Subject to subsection (4) below, where it appears to the Commissioners
(a) that any person is a person from whom any amount has become due in respect
of any duty of excise; and
(b) at the amount due can be ascertained by the Commissioners, the Commissioners
may assess the amount of duty due from that person and notify that amount to that
person or his representative.]
(4) An assessment of the amount of any duty of excise due from any person shall
not be made under this section at any time after whichever is the earlier of the
following times, that is to say
(a) subject to subsection (5) below, the end of the period of [4 years] beginning
with the time when his liability to the duty arose; and
(b) the end of the period of one year beginning with the day on which evidence of
facts, sufficient in the opinion of the Commissioners to justify the making of the
assessment, comes to their knowledge;
but this subsection shall be without prejudice, where further evidence comes to the
knowledge of the Commissioners at any time after the making of an assessment
under this section, to the making of a further assessment within the period
applicable by virtue of this subsection in relation to that further assessment.
(5) Subsection (4) above shall have effect as if the reference in paragraph (a) to [4
years] were a reference to twenty years [in any case falling within subsection (5A)
(a) or (b)].
[(5A) The cases are
(a) a case involving a loss of duty of excise brought about deliberately by the person
assessed (P) or by another person acting on P's behalf, and
(b) a case in which P has participated in a transaction knowing that it was part of
arrangements of any kind (whether or not legally enforceable) intended to bring
about a loss of duty of excise.]
13 Assessments to penalties
(1) Where any person is liable to a penalty under this Chapter, the Commissioners
may assess the amount due by way of penalty and notify that person, or his
representative, accordingly.
Finance Act 2003, Sections 25, 29, 30 and 31
25 Penalty for evasion.
(1) In any case where
(a) person engages in any conduct for the purpose of evading any relevant tax or
duty, and
(b) his conduct involves dishonesty (whether or not such as to give rise to any
criminal liability), that person is liable to a penalty of an amount equal to the
amount of the tax or duty evaded or, as the case may be, sought to be evaded. (
)
29 Reduction of penalty under section 25 or 26.
(1) Where a person is liable to a penalty under section 25 or 26
(a) the Commissioners (whether originally or on review) or, on appeal, an appeal
tribunal may reduce the penalty to such amount (including nil) as they think proper;
and
(b) the Commissioners on a review, or an appeal tribunal on an appeal, relating to
a penalty reduced by the Commissioners under this subsection may cancel the
whole or any part of the reduction previously made by the Commissioners. (
)
30 Demand for penalties
(1) Where a person is liable to a penalty under this Part, the Commissioners may
give to that person or his representative a notice in writing (a "demand notice")
demanding payment of the amount due by way of penalty.
(2) An amount demanded as due from a person or his representative in accordance
with subsection (1) is recoverable as if it were an amount due from the person or,
as the case may be, the representative as an amount of customs duty. This
subsection is subject to
(a) any appeal under [section 33] (appeals to tribunal); and
(b) subsection (3).
(3) An amount so demanded is not recoverable if or to the extent that
(a) the demand has subsequently been withdrawn; or (b) the amount has been
reduced under section 29.
31 Time limits for demands for penalties
(1) A demand notice may not be given
(a) in the case of a penalty under section 25, more than 20 years after the conduct
giving rise to the liability to the penalty ceased, or
(b) in the case of a penalty under section 26, more than 3 years after the conduct
giving rise to the liability to the penalty ceased.
(2) A demand notice may not be given more than 2 years after there has come to
the knowledge of the Commissioners evidence of facts sufficient in the opinion of
the Commissioners to justify the giving of the demand notice.
Customs and Excise Management Act 1979, Sections 78 and 139
78 Customs and excise control of persons entering or leaving the United Kingdom.
(
)
(4) Any person failing to declare anything or to produce any baggage or thing as
required by this section shall be liable on summary conviction to a penalty of three
times the value of the thing not declared or of the baggage or thing not produced,
as the case may be, or [level 3 on the standard scale], whichever is the greater. (
)
139 Provisions as to detention, seizure and condemnation of goods, etc
(1) Anything liable to forfeiture under the customs and excise Acts may be seized
or detained by any officer or constable or any member of Her Majesty's armed
forces or coastguard.
(2) Where anything is seized or detained as liable to forfeiture under the customs
and excise Acts by a person other than an officer, that person shall, subject to
subsection (3) below, either
(a) deliver that thing to the nearest convenient office of customs and excise; or
(b) if such delivery is not practicable, give to the Commissioners at the nearest
convenient office of customs and excise notice in writing of the seizure or detention
with full particulars of the thing seized or detained.
(3) Where the person seizing or detaining anything as liable to forfeiture under the
customs and excise Acts is a constable and that thing is or may be required for use
in connection with any proceedings to be brought otherwise than under those Acts
it may, subject to subsection (4) below, be retained in the custody of the police until
either those proceedings are completed or it is decided that no such proceedings
shall be brought.
(4) The following provisions apply in relation to things retained in the custody of
the police by virtue of subsection (3) above, that is to say
a) notice in writing of the seizure or detention and of the intention to retain the
thing in question in the custody of the police, together with full particulars as to
that thing, shall be given to the Commissioners at the nearest convenient office of
customs and excise;
b) any officer shall be permitted to examine that thing and take account thereof at
any time while it remains in the custody of the police;
c) nothing in [section 31 of the Police (Northern Ireland) Act 1998] shall apply in
relation to that thing.
(5) Subject to subsections (3) and (4) above and to Schedule 3 to this Act, anything
seized or detained under the customs and excise Acts shall, pending the
determination as to its forfeiture or disposal, be dealt with, and, if condemned or
deemed to have been condemned or forfeited, shall be disposed of in such manner
as the Commissioners may direct.
(6) Schedule 3 to this Act shall have effect for the purpose of forfeitures, and of
proceedings for the condemnation of anything as being forfeited, under the customs
and excise Acts.
(7) If any person, not being an officer, by whom anything is seized or detained or
who has custody thereof after its seizure or detention, fails to comply with any
requirement of this section or with any direction of the Commissioners given
thereunder, he shall be liable on summary conviction to a penalty of [level 2 on the
standard scale].
(8) Subsections (2) to (7) above shall apply in relation to any dutiable goods seized
or detained by any person other than an officer notwithstanding that they were not
so seized as liable to forfeiture under the customs and excise Acts.
Travellers' Allowance Order 1994 as amended by SI 1995/3044, SI 2008/3058 and SI
2009/3172
1. This Order may be cited as the Travellers Allowances Order 1994 and shall come into
force on 1st April 1994.
2.
(1) Subject to the following provisions of this Order a person who has travelled
from a third country shall on entering the United Kingdom be relieved from
payment of value added tax and excise duty on goods of the descriptions and in the
quantities shown in the Schedule to this Order obtained by him in a third country
and contained in his personal luggage.
(2) For the purposes of this article
(a) goods shall be treated as contained in a person's personal luggage where they
are carried with or accompanied by the person or, if intended to accompany him,
were at the time of his departure for the United Kingdom consigned by him as
personal luggage to the transport operator with whom he travelled;
(b) a person shall not be treated as having travelled from a third country by reason
only of his having arrived from its territorial waters or air space;
(c) "third country"
(i) shares the definition that applies to that expression for the purposes of Council
Directive 2007/74/EC (this is termed "outside country "below) (see both indents of
Article 3(1) of the Directive) (value added tax and excise duty exemptions for
travellers from outside the Member States of the European Union, etc); but
(ii) it incorporates the definition that applies for the purposes of that Directive to
"territory where the Community provisions on VAT or excise duty or both do not
apply" (this is termed "outside territory" below) (see both indents of Article 3(2)
of that Directive); but
(iii) any outside territory where those "Community provisions on VAT" do apply
(or where that Directive regards them as applying) is not a third country for value
added tax purposes; and
(iv) any outside territory where those "Community provisions on
excise duty"
do apply (or where that Directive regards them as applying) is not a third country
for excise duty purposes
(3) Where the person's journey involved transit through an outside country, or
began in outside territory, this Order applies if that person is unable to establish to
an officer of Revenue and Customs that the goods contained in that person's
personal luggage were acquired subject to the general conditions governing
taxation on the domestic market of a member State and do not qualify for any
refunding of value added tax or excise duty
1. The reliefs afforded under this Order are subject to the condition that the goods
in\question, as indicated by their nature or quantity or otherwise, are not imported
for a commercial purpose nor are used for such purpose; and if that condition is not
complied with in relation to any goods, those goods shall, unless the noncompliance was sanctioned by the Commissioners, be liable to forfeiture.
[That condition is complied with, for example, where an occasional importation
consists exclusively of goods intended as presents, or of goods for the personal or
family use of the person in question.
No relief shall be afforded under this Order to any person under the age of 17 in
respect of tobacco products [alcoholic beverages and alcohol].
Schedule -
Tobacco products 200 cigarettes, or 100 cigarillos, or 50 cigars, or 250 grams of
smoking tobacco. Notes: (k) Each respective amount represents 100% of the total
relief afforded for tobacco products;(l) For any one person, the relief applies to any
combination of tobacco products provided that the aggregate of the percentages
used up from the relief the person is afforded for such products does not
exceed 100%.
