Andrzej Osmolski v The Commissioners for HMRC
[2023] UKFTT 905 (TC)
Dan Andrei Hagi-Nicovici v The Commissioners for HMRC
6 November 2023
[2023] UKFTT 967 (TC)
First-tier Tribunal
A truck driver was caught with untaxed beer. Even though he claimed he didn't know it was illegal, the court said he was still responsible for the taxes because he had the beer. They also fined him extra because they thought he knew what he was doing.
Key Facts
- •On 10 May 2018, the Appellant, Mr. Hagi-Nicovici, was driving a lorry carrying 26,064 liters of mixed beers with unpaid excise duty through Dover.
- •The lorry and its load were seized. The Appellant was assessed for excise duty (£32,251) and a wrongdoing penalty (£11,287) for deliberate behavior.
- •The CMR (Cross Movement Record) was a photocopy with handwritten additions, and the ARC number was from a previous, unrelated shipment.
- •The Appellant's account of a French customs check resulting in a broken seal was deemed not credible.
- •The Appellant's employment with JPH Transport Ltd was informal, with cash payments, no contract, and no payslips.
- •The Appellant gave incomplete answers to a Border Force questionnaire, and his testimony was deemed unreliable and contradictory.
Legal Principles
Excise duty point for goods released for consumption in another Member State and held for commercial purposes in the UK.
Regulation 13, Excise Goods (Holding, Movement and Duty Point) Regulations 2010
Goods are liable to forfeiture if excise duty is not paid; failure to challenge seizure within one month results in deemed forfeiture.
Regulation 88, Excise Goods (Holding, Movement and Duty Point) Regulations 2010; Section 139, Customs and Excise Management Act 1979; Schedule 3, paragraph 5, CEMA
HMRC has power to assess excise duty and penalties.
Section 12 and 13, Finance Act 1994; Schedule 41, Finance Act 2008
A person in physical possession of dutiable goods at the excise duty point is liable for the excise duty, regardless of knowledge or culpability.
HMRC v Martyn Glenn Perfect [2022] EWCA Civ 330
Wrongdoing penalties are based on potential lost revenue (PLR) and the degree of culpability (deliberate and concealed, deliberate but not concealed, or other).
Schedule 41, paragraph 4, 6B, 10, Finance Act 2008
Definition of 'deliberate' in the context of tax evasion requires intent to mislead or recklessness as to whether it would do so.
Tooth v HMRC [2021] UKSC 17
Outcomes
Appeal dismissed.
The Appellant was liable for excise duty due to physical possession of the goods at the excise duty point, as per Perfect 2. The wrongdoing penalty was justified due to deliberate behavior; the Appellant knew duty was due and unpaid and was engaged in a smuggling attempt.