A crackdown on duty fraud will force any business caught handling black market tobacco or alcohol to cough up the missing tax.
Customs have started using new powers to fine any business that can’t prove duty and VAT have been paid on the products it handles.
Previously, Customs officers confiscated duty-avoided tobacco and alcohol, but prosecutions only tended to be brought on large seizures due to the time and expense involved.
The new ‘VAT and Excise wrongdoing penalties’ allow HMRC to target traders across the supply chain with a simple system that is easy to enforce.
For some of the larger hauls, the fines could total thousands of pounds and be enough to bankrupt the businesses involved.
“We aim to support people who take care to pay the right amount of tax,” said Mike Eland, director of enforcement and compliance at HMRC. “Part of the support is to come down hard on those who deliberately evade paying. These new penalties are tougher and more consistent.”
The powers will also force bonded warehouse keepers to check tobacco and alcohol leaving their premises goes to a bonded trader – or pay tax on it.
However, HMRC could waive or reduce the fines if it decided traders had done everything in their power to check the duty and VAT had been paid, said Eland.
Federation of Wholesale Distributors CEO James Bielby welcomed the measures. “This gives Customs an extra weapon to tackle this fraud and sends out the message that businesses should not touch duty-avoided stock,” he said.
Read more
In the line of duty with HMRC (15 May 2010)
Customs have started using new powers to fine any business that can’t prove duty and VAT have been paid on the products it handles.
Previously, Customs officers confiscated duty-avoided tobacco and alcohol, but prosecutions only tended to be brought on large seizures due to the time and expense involved.
The new ‘VAT and Excise wrongdoing penalties’ allow HMRC to target traders across the supply chain with a simple system that is easy to enforce.
For some of the larger hauls, the fines could total thousands of pounds and be enough to bankrupt the businesses involved.
“We aim to support people who take care to pay the right amount of tax,” said Mike Eland, director of enforcement and compliance at HMRC. “Part of the support is to come down hard on those who deliberately evade paying. These new penalties are tougher and more consistent.”
The powers will also force bonded warehouse keepers to check tobacco and alcohol leaving their premises goes to a bonded trader – or pay tax on it.
However, HMRC could waive or reduce the fines if it decided traders had done everything in their power to check the duty and VAT had been paid, said Eland.
Federation of Wholesale Distributors CEO James Bielby welcomed the measures. “This gives Customs an extra weapon to tackle this fraud and sends out the message that businesses should not touch duty-avoided stock,” he said.
Read more
In the line of duty with HMRC (15 May 2010)
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