HM Revenue & Customs (HMRC) has begun a campaign to target warehouse keepers and third-party hauliers who may unknowingly be handling excise goods on which the duty has yet to be paid, warns the United Kingdom Warehousing Association (UKWA).
UKWA says that any company found guilty of storing goods on which duty is outstanding could face ‘financial ruin’ – even if the storage company was unaware that duty had not been paid.
Alan Powell of Alan Powell Associates, UKWA’s honorary adviser on Customs & Excise Matters, said: “While HMRC has had the authority to assess anyone for duty on goods illegally diverted from bonded movements who was ‘aware or should reasonably have been aware’ of the diversion at any point in the supply chain since 2010, action has been spasmodic.
“However,” he continues, “HMRC is deploying more officers to investigate excise goods supply chains. As a result, we are now increasingly seeing third-party service providers, including hauliers, warehouse keepers and lessors of property, such as barns and outbuildings, being penalised by HMRC as a result of their involvement with businesses that have evaded duty on alcohol and have absconded – so called ‘missing traders’.”
Anyone found to have held or dealt in duty-unpaid excise goods, can be fined up to 100 per cent of the duty evaded, as Alan Powell explains: “HMRC had been slow to apply what are called ‘excise wrong-doing penalties’ but are now vigorously applying them. As a result, many small and medium companies are facing unexpected bills and penalties from HMRC of hundreds of thousands of pounds.”
Powell continues: “In simple terms, if an organisation has been involved at any stage in the supply of goods that have been illicitly diverted from a bonded supply chain, that organisation could be liable for duty – even if that organisation is not directly responsible for the diversion.
“Essentially, anyone handling duty-unpaid product is classed as being ‘contaminated’ within the supply chain and assessed for the duty.”
In one particular instance, a storage company is facing a duty bill alone for nearly £100,000 after HMRC inspectors found duty-unpaid alcohol stored at the company’s site.
“The storage company was simply unaware about the risks involved in handling loads of duty unpaid alcohol and the director of the company to whom they leased the space has disappeared,” says UKWA’s chief executive officer, Roger Williams.
The message from UKWA is that if you offer third party logistical services of any kind, you must check what is being handled or stored – do not take storage requirements on face value.
Alan Powell says: “Always be wary and query the business need, checking out with HMRC if possible. If in any doubt, do not become involved – it could end very badly.”