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Forwarders in the crossfire as Customs men crack down on excise fraud

[ March 25, 2013   //   ]

HM Revenue & Customs (HMRC) is increasingly targeting transport and warehouse operators who – possibly unknowingly – have handled excise goods on which the duty has not been paid, report BIFA and the UK Warehousing Association (UKWA).

While HMRC has since 2010 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 diversion fraud action was only spasmodic, says Alan Powell Associates, UKWA’s honorary adviser on Customs & Excise Matters.

However HMRC is now deploying more officers to investigate excise goods fraud and an increasing number of third party service providers, including hauliers and warehouse keepers are being penalised by HMRC for their involvement with ‘missing traders’ who evade duty on alcohol and then abscond.

Alan Powell explained: “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.

“If an organisation has been involved at any stage in the supply of goods that have been illicitly diverted from a bonded supply chain, it could be liable for duty – even if it 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.”

Anyone offering third party logistics services of any kind is strongly advised to check what is being handled or stored and not to take storage requirements on face value.

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