Freedom Recycling Ltd v The Commissioners for HMRC
[2024] UKFTT 369 (TC)
Gurmit Singh v The Commissioners for HMRC
25 August 2023
[2023] UKFTT 738 (TC)
First-tier Tribunal
Gurmit helped store illegal alcohol. He said he didn't know, but the judge said he did and had to pay the tax. But the judge also said HMRC didn't explain why they fined him, so they can't make him pay that.
Key Facts
- •HMRC seized 26,179 litres of undeclared alcohol from a rented unit.
- •Appellant Gurmit Singh was not present during the seizure but arrived later.
- •Appellant possessed a key to the unit's side door and knew the location of the forklift key blocking the main entrance.
- •Appellant initially denied knowledge but later provided a contact for his 'boss', who was subsequently uncontactable.
- •The assessment for excise duty was £32,670, and the penalty was £18,866.
- •Appeal against the assessment was late but admitted due to lack of opposition from HMRC and potential prejudice to the appellant.
- •The Appellant's testimony contained significant discrepancies and was deemed unreliable by the Tribunal.
- •The Tribunal found that the Appellant had frequent access to the unit, paid rent, and was actively involved in handling the alcohol.
Legal Principles
In appeals against excise duty assessments, the appellant bears the burden of proof to disprove the assessment.
None explicitly stated, but implied throughout the judgement.
In appeals against penalties, HMRC must prove the penalty's criteria were met; the appellant can then demonstrate reasonable excuse or penalty reduction.
None explicitly stated, but implied throughout the judgement.
Holding excise goods doesn't require physical possession; control with intent to assert it against others suffices. This is based on R v Taylor and Wood [2013] EWCA Crim 1151.
R v Taylor and Wood [2013] EWCA Crim 1151
An agent acting on a principal's instructions can assert control against others not involved in the illicit arrangement.
Legal interpretation by the Tribunal.
Excise duty is payable at the time excise goods are released for consumption (Regulation 5, HMDP Regulations 2010).
The Excise Goods (Holding, Movement and Duty Point) Regulations 2010
The person holding excise goods at the time of release for consumption is liable for duty; any other person involved is jointly liable (Regulation 10, HMDP Regulations 2010).
The Excise Goods (Holding, Movement and Duty Point) Regulations 2010
Outcomes
Appeal against the excise duty assessment dismissed.
The Tribunal found the Appellant exercised control over the alcohol, satisfying the definition of 'holding' even without direct physical possession at the time of seizure.
Appeal against the penalty allowed.
HMRC failed to prove the penalty was for 'handling' as stated; Officer Musli's testimony revealed it was intended for 'failure to notify', which wasn't argued or proven.