Customs duty - civil investigation of suspected evasion

By Tolley
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The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Customs duty - civil investigation of suspected evasion
  • Background
  • Taxes and duties included
  • Conducting the investigation
  • Penalties
  • Appeals and reconsiderations

This guidance note provides an overview of how HMRC investigates the potential evasion of customs duty and import VAT.

Background

HMRC will normally investigate the following under their civil evasion penalty procedure:

Notice 300 ; FA 2003, s 24(2)(d), (3); De Voil Indirect Tax Service V5.357 (subscription sensitive)
  • a potential smuggling offence by a traveller or a trader
  • fraudulent declarations and dishonest claims for repayment of duty or relief from duty

HMRC will undertake the investigation with a view to imposing a customs civil evasion penalty (CCEP) if it is satisfied that the person is guilty of dishonest conduct. The investigation will not be conducted with a view to prosecuting the person for evading customs duty and / or taxes.

The provisions detailed in this guidance note are applicable to:

  • individual travellers
  • commercial importers
  • exporters, or
  • their agent or representative
Taxes and duties included

The CCEP regime will cover breaches of Union and UK customs law relating to the import, export and holding or processing of imported goods under customs supervision. This includes breaches by individual travellers as well as businesses. The duties and taxes covered by these provisions include Customs Duty (also known as import duty), import VAT and customs duties in the agricultural sector (the ‘relevant tax and duty’).

HMRC will impose a CCEP when it is satisfied that the person has evaded the ‘relevant tax and duty’ and that their conduct was dishonest. For example if a person claims (including deferred or postponed payments) any repayment, rebate, drawback, relief, exemption or allowance to which they are not entitled;

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