Key Facts
- •Mr. Omar imported 12kg of shisha tobacco and 800 cigarettes through Heathrow Airport, declaring nothing.
- •The tobacco was seized by Border Force.
- •HMRC assessed civil evasion penalties totaling £1363.
- •Mr. Omar claimed he didn't understand customs regulations due to language barriers and fatigue.
- •HMRC initially assessed penalties with a 25% reduction, later increasing it to 40% after further correspondence.
- •Mr. Omar appealed the penalty assessment.
Legal Principles
HMRC may issue penalties for evading excise or customs duty if the conduct involves dishonesty.
Section 8 Finance Act 1994 & Section 25 Finance Act 2003
HMRC can reduce penalties as they see fit.
Section 8(4) FA 1994 & Section 29(1) FA 2003
The burden of proof is on HMRC to prove dishonesty on a balance of probabilities.
Section 16(6) FA 1994 & Section 33(7)(a) FA 2003
The test for dishonesty is primarily objective, considering what a reasonable person would know, but also takes into account the individual's knowledge and circumstances.
Sahib Restaurant Ltd v HMRC, Barlow Clowes International Limited v Eurotrust International Limited, Zuned Osman v HMRC
Outcomes
Appeal dismissed.
The Tribunal found Mr. Omar's conduct dishonest based on his experience as a regular international traveler, his understanding of the green channel, and inconsistencies in his explanations.
HMRC's 40% penalty reduction upheld.
The Tribunal found the reduction fairly reflected Mr. Omar's disclosure and cooperation.