Monday, March 11, 2013

Duty Status is the Responsibility of the Freight or Road Haulage Operator says HMRC

UK Warehousing Group Warns Members that Ignorance is No Defence Against Huge Penalties
Shipping News Feature

UK – According to the latest release from the United Kingdom Warehousing Association (UKWA) there is growing evidence that HM Revenue & Customs (HMRC) has begun a campaign to target warehouse keepers and road haulage operators who may unknowingly be handling excise goods on which the duty has yet to be paid. This is of course more than a little troubling for the vast majority of innocent operators, many of whom already have to worry about the implications of handling illicit freight in consignments misdeclared by unscrupulous customers. The UKWA is warning 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, 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’.

“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. 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.”

This latest move seems to be a further reinforcement of the ‘guilty till proven innocent’ policies which seem to be becoming the norm in the world of British shipping and forwarding. The policy is a clear indication that ignorance is no defence despite the fact that knowledge of goods and there illegality or dutiable state is hardly the same as knowing the declared status of a consignment, often one whose precise nature could only be obtained by rifling through the contents of sealed packages – hardly the act of an ethical professional warehouse keeper, and something that would still do nothing to enhance provenance.

Anyone who is found to have held or dealt in duty-unpaid excise goods, can be fined up to 100% of the duty evaded and 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. UKWA’s chief executive officer, Roger Williams commented:

“The storage company was simply unaware about the risks involved in handling loads of duty un-paid alcohol and the director of the company to whom they leased the space has disappeared.”

The message from Alan Powell and 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 added:

“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.”

Photo: Nothing new about illicit booze!