Spas Ivanov v The Commissioners for HMRC
[2024] UKFTT 433 (TC)
Paul David Eveleigh v The Commissioners for HMRC
3 April 2023
[2023] UKFTT 356 (TC)
First-tier Tribunal
Someone was caught smuggling tobacco and got fined for it. They also had to pay taxes on the tobacco. They argued that the tax was unfair since they already got punished. The judge said the tax was separate from the punishment and had to be paid, as it's the law.
Key Facts
- •Appeal against HMRC's £121,666 excise duty assessment on 1,160kg of tobacco imported from France.
- •Appellant pleaded guilty to fraudulent evasion of excise duty and received a suspended sentence, community service, and a fine.
- •Tobacco and vehicle were seized under the Customs and Excise Management Act 1979.
- •Appellant argued that the assessment was disproportionate considering the existing penalties and his financial situation.
- •HMRC argued that they had no discretion to waive the assessment and that proportionality did not apply to the duty itself.
Legal Principles
Proportionality
EU law and Article 1 Protocol 1 of the European Convention on Human Rights
Strict liability for excise duty
Council Directive 2008/118/EC, Articles 2 and 7; HMRC v Perfect [2022] EWCA Civ 330
Distinction between chargeability, assessment, and collection of excise duty
Whitney v Commissioners of Inland Revenue [1926] AC 37; R (on the application of Derry) v HMRC [2019] 4 All ER 127
Excise duty assessment is not a penalty
Kevan Denley v HMRC [2017] UKUT 340 (TCC)
Outcomes
Appeal dismissed
HMRC has no discretion to waive excise duty assessment where liability is established; the assessment is not a penalty; the scheme and assessment are proportionate.