Asif Patel v The Commissioners for HMRC
[2024] UKFTT 80 (TC)
Esmat Farsi v The Commissioners for HMRC
16 February 2024
[2024] UKFTT 135 (TC)
First-tier Tribunal
Ms. Farsi was caught with too many cigarettes at the airport and fined. She said she didn't understand the rules because of stress and language issues. The judge understood her situation but still said she acted dishonestly because she lied about the cigarettes. The fine was reduced, but the appeal was dismissed.
Key Facts
- •Esmat Farsi was stopped at Manchester Airport with 8,500 cigarettes, exceeding the permitted allowance.
- •Ms. Farsi declared she had nothing to declare.
- •Penalties under s 25(1) Finance Act 2003 (£738) and s 8(1) Finance Act 1994 (£2,568) were issued.
- •Ms. Farsi claimed distress, weak English, and unawareness of import limits as reasons.
- •HMRC offered 20% mitigation for disclosure and cooperation.
Legal Principles
Dishonesty is determined by a two-stage test: (1) subjectively ascertaining the individual's knowledge/belief; (2) objectively applying standards of ordinary decent people.
Ivey v Genting Casinos (UK) Ltd
Finance Act 1994, s 8(1): Penalty for excise duty evasion involving dishonesty.
Finance Act 1994
Finance Act 2003, s 25(1): Penalty for customs duty evasion involving dishonesty.
Finance Act 2003
Tribunal may reduce penalties under s 29(1)(a) Finance Act 2003 and s 8(4)(a) Finance Act 1994.
Finance Act 2003 & Finance Act 1994
Outcomes
Appeal dismissed.
The Tribunal found Ms. Farsi acted dishonestly, despite acknowledging her distress and language difficulties. The revised penalty of £2,784 after 20% mitigation was deemed appropriate.