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Penalties and Fines for Customs and Excise Infringements

By: Dave Howell - Updated: 10 Aug 2012 | comments*Discuss
 
Penalty Fine Customs And Excise

Your business must comply with all the customs and excise legislation that is currently in force or face a penalty that could include a fine. Any customs and excise regulations that your international business does break can mean that the HMRC (HM Revenue & Customs) will take action against your enterprise.

At the moment there are separate systems that govern the penalties your business could suffer depending on if you break customs or excise rules. From 2009 there will be one single penalty system that will cover all offences involving the international trade of goods.

Excise Penalties

Under the current customs regulations there are two types of excise offences that your business can commit resulting in a penalty:

Excise Civil Evasion penalties is an offence where a business has deliberately attempted to evade paying of any customs duty that is due. In all cases your business can expect to pay a fine if found guilty of this offence.

Excise Civil Penalties are related to the strict rules that govern the international transport, movement and sale of excise duty on tobacco, alcohol and hydrocarbon oils. Your business must follow the statutory requirements for the handling of these goods or face a penalty. Also, gaming, betting, air passengers and lottery are also subject to this kind of penalty.

Consult your legal adviser or contact the HMRC if you are not sure if the goods your business is about to transport into the UK or handles regularly fall into any of these categories. Failure to comply with the regulations will mean a penalty, so always check!

At the moment your business should be aware of four categories of Excise Civil Penalties:

  • Fixed Penalty
  • Daily Penalty
  • Geared Penalty
  • Breach of Waling Possession.
Each of these penalties is detailed in the customs notice 209 that is available on the HMRC website. In most cases HMRC will issue a warning if they believe that an offence has been committed, but that wasn’t a deliberate attempt to defraud.

Customs Penalties

Under the current customs regulations there are two types of customs offences that your business can commit resulting in a penalty:

Customs Civil Penalties relates to breaches of export rules, customs duty regulations, community export duty, community import duty and import VAT duty. Full details of each of these areas of customs procedures are on the HMRC website. It is vitally important to understand the transport requirements when moving goods across the EU community. For more information about how any penalty your business gets is calculated see customs notice 301 available on the HMRC website. In most cases HMRC will issue a warning if they believe that an offence has been committed, but that wasn’t a deliberate attempt to defraud.

Customs Civil Evasion Penalties is defined as a trader that has deliberately attempted to evade the payment of import duty or export VAT. Any international business that puts in place systems that willfully evade the payment of any customs duty will always attract a stiff penalty as the system were premeditated.

The HMRC can seize and detain any vehicles that transport goods that it believes have not complied fully with the current customs and excise regulations. Note that in addition to any HMRC penalty that could be applied to your business, if you import restricted goods that are not supported with the appropriate documentation, or import counterfeit or prohibited goods, you would also face a criminal prosecution. Also note that HMRC will charge 7.5 per cent interest on any outstanding customs or excise duty charges your business fails to pay on time.

How to Appeal Against a Penalty

If your business feels that the penalty and any fine it has been given isn’t justified, you can appeal. The appeal process is the same for customs or excise offences. The first step is to contact HMRC and request what is called a departmental review. You have 45 days to make your application for departmental review after you have received your penalty notice.

After the review has taken place, if you are still not happy with the result, you can move to an appeal with the VAT and Duties Tribunal. You can represent yourself at the tribunal or have someone speak for your business. It is important to lodge the correct paperwork with the tribunal, so double-check you have sent in the right forms to avoid confusion and delays.

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