Gurmit Singh v The Commissioners for HMRC
[2023] UKFTT 738 (TC)
Kent Couriers Limited v The Commissioners for HMRC
20 February 2024
[2024] UKFTT 145 (TC)
First-tier Tribunal
A courier company was wrongly charged excise duty on vodka it unknowingly transported. While they were fined for not checking the customer properly, the fine was greatly reduced because they cooperated with the investigation. The court criticized the tax authority for making many mistakes in their initial communications.
Key Facts
- •Kent Couriers Ltd (Appellant) appealed against excise duty (£36,176) and a wrongdoing penalty (£10,852) assessments.
- •The Appellant, a courier company, arranged transport of goods (believed to be soft drinks) via Palletways network.
- •The shipment contained vodka, seized by UK Border Force.
- •The Appellant claimed it had no knowledge the goods were alcohol.
- •HMRC's initial communication contained several errors.
Legal Principles
Meaning of 'holding' in Article 33 of Directive 2008/118/EC and Regulation 13 of the Excise Goods (Holding, Movement and Duty Point) Regulations 2010.
CJEU in Commissioners for Her Majesty’s Revenue and Customs v WR (C-279/19), Dawson’s (Wales) Limited v The Commissioners for Her Majesty’s Revenue and Customs [2023] EWCA Civ 332, Agniezska Hartleb T/A Hartleb Transport v The Commissioners for His Majesty’s Revenue and Customs [2024] UKUT 00034 (TCC)
Liability for wrongdoing penalty under Schedule 41 to the Finance Act 2008; whether the Appellant was 'concerned in carrying, removing, depositing, keeping or otherwise dealing with' the alcohol.
Schedule 41, Finance Act 2008
Reasonable excuse for wrongdoing penalty; objective test of what a reasonable person would have done.
The Clean Car Company Ltd v The Commissioners of Customs & Excise [1991] VATTR 234, Perfect v The Commissioners for Her Majesty’s Revenue and Customs [2017] UKUT 476 (TCC)
Outcomes
Appeal against excise duty assessment upheld.
The Appellant did not have physical possession or de facto control of the goods at the excise duty point; its legal control was highly circumscribed. The Appellant was neither 'holding' nor 'making the delivery' of the alcohol at the excise duty point.
Wrongdoing penalty affirmed, but reduced to £7,235.20.
The Appellant's actions were not deliberate, but it did not have a reasonable excuse for its failure to conduct due diligence on the customer. The Tribunal exercised its power to substitute a different penalty amount, applying the minimum penalty for a non-deliberate act with prompted disclosure and maximal reduction for quality of disclosure.