Charlene Hughes v The Commissioners for HMRC
[2024] UKUT 108 (TCC)
Giles Bunting v The Commissioners for HMRC
23 May 2024
[2024] UKFTT 431 (TC)
First-tier Tribunal
A farmer rented out a storage unit. Someone stored illegal cigarettes there. The government tried to make the farmer pay the taxes. The court said the farmer wasn't responsible because he didn't know about the cigarettes.
Key Facts
- •Giles Bunting, a farm owner, rented storage units on his property.
- •Duty-unpaid cigarettes were found in a unit rented to a third party (CD).
- •HMRC assessed Bunting with joint and several liability for excise duty and a penalty.
- •Bunting argued he had no knowledge of the cigarettes and his actions were reasonable.
- •HMRC argued Bunting should have exercised due diligence and was therefore involved in the holding of the goods.
Legal Principles
A property owner who rents to a third party is not automatically 'involved in the holding' of goods unless they know or should know excise goods are present.
Excise Goods (Holding, Movement and Duty Point) Regulations 2010, reg 10(2)
For 'concerned in…keeping' under Schedule 41, FA 2008, knowledge or reason to know that excise goods are present is required.
Finance Act 2008, Sch 41, para 4(1)
'Holding' excise goods requires physical possession, regardless of knowledge of the duty.
Excise Goods (Holding, Movement and Duty Point) Regulations 2010, reg 10(1)
Outcomes
Appeals allowed.
Bunting lacked knowledge of the cigarettes and his actions did not meet the threshold for 'involved in the holding' under the regulations or 'concerned in…keeping' under the Finance Act.