Civil penalties for contraventions of customs law

By Tolley
VAT_tax_img3

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

  • Civil penalties for contraventions of customs law
  • Background
  • Applying a penalty
  • Business discovers the error
  • Calculating the penalty
  • Appeals and reconsiderations

This guidance note provides an overview of the civil penalties that can be imposed by HMRC on a business who engages in international trade in goods and who does not comply with EU and national legal requirements.

Background

Customs civil penalties (CCP) are imposed by HMRC in order to encourage businesses to be compliant with the customs laws and regulations. HMRC is required under EU law to promote compliance with Union provisions and to implement arrangements to counter non-compliance. HMRC considers that for the majority of cases, the imposition of a civil penalty is the most appropriate course of action. However, it can impose a civil evasion penalty or seek a criminal prosecution where this is deemed as more appropriate.

HMRC has stated that it will seek to educate the business on complying with the customs law, and where it concludes that educating the business is not appropriate then it will look at taking CCP action. HMRC has also stated that when faced with continued non-compliance, it will consider all the circumstances and select the most appropriate course of action. In most cases, it will take CCP action. However, if the business has an authorisation in place, HMRC can consider amending or revoking that authorisation rather than taking CCP action.

FA 2003, ss 24–41 enables HMRC to levy on the following civil penalties:

  • civil evasion penalty (see the Customs duty ― civil investigation of suspected evasion guidance note for more information)
  • civil penalty for contraventions of customs rules relating to certain specified taxes and duties

The taxes and duties that are covered by the above penalties are as follows:

  • customs duty

More on Customs and international trade: