Customs examination powers
Published 5 December 2016
© Crown copyright 2016
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/customs-examination-powers/customs-examination-powers
Who is likely to be affected
Those carrying on a trade or business where there is reasonable cause to believe their premises contain customs goods.
General description of the measure
This measure extends the powers HM Revenue and Customs (HMRC) currently has under section 24 of the Finance Act (FA) 1994 so they can examine goods thoroughly away from ports, airports and other approved places under customs control. It will enable HMRC to require the premises operator to open or unpack any container. The use of this power is expected, in the main, to be exercised where goods have been misdeclared, without payment of the correct amount of duty, at the time of import.
Under current legislative powers, customs officers working inland and post-clearance, away from ports, airports and other approved places under customs control, do not have the ability to examine and take account of goods, which includes opening, marking, weighing, loading, unloading etc. Customs officers, at present, can only pick up and look at goods that are visible to them when visiting businesses premises and where there is reasonable cause to believe a customs offence has been committed. This amendment will ensure that HMRC can require any container to be opened or unpacked.
Policy objective
It is essential that customs officers are empowered to enter and inspect premises, examine goods, and take account of them, as well as open or unpack any container, or require it to be opened or unpacked in order to search it or anything in it. The availability of this power will reduce the revenue risk by bringing to account any unpaid customs duties or, by removing those goods from the market which would have had a detrimental impact on compliant businesses.
Background to the measure
There are some areas where customs and excise powers, originally designed to deal with smuggling and routine checks at airports and ports, need to be strengthened to deal with modern control and business practices and new methods of evading duty. Today, HMRC often investigates sophisticated frauds involving customs goods, the majority of which are at inland premises, post-clearance, and not within the confines of approved premises, including ports and airports. It is essential that customs officers are empowered to enter and inspect premises, examine goods, and take account of them, as well as open or unpack any container, or require it to be opened or unpacked in order to search it or anything in it. An amendment, therefore, is required to strengthen the power under section 24 of the FA 1994 to deal with modern control and business practices.
Detailed proposal
Operative date
The measure will have effect on and after the date of Royal Assent to Finance Bill 2017.
Current law
Current law is contained in part 1, chapter 3, section 24 of FA 1994.
Proposed revisions
Legislation will be introduced in Finance Bill 2017 to amend section 24 of the FA 1994.
The legislation will provide officers with the additional power to examine and take account of goods when exercising their power of entry under section 24. This amendment will mean that an officer will not have to rely on just inspecting any goods found on the premises, but will have the power to examine and take account of those goods which will include opening and unpacking any container and searching that container or anything in it.
Summary of impacts
Exchequer impact (£m)
| 2016 to 2017 | 2017 to 2018 | 2018 to 2019 | 2019 to 2020 | 2020 to 2021 | 2021 to 2022 |
|---|---|---|---|---|---|
| - | nil | nil | nil | nil | nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
This measure will not impact on individuals or households. The measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
No equalities impacts in relation to any protected characteristic have been identified in relation to this measure.
Impact on business including civil society organisations
This measure is expected to have no impact on businesses or civil society organisations. It is intended to ensure that the statutory authority is available for goods to be fully examined away from ports, airports and approved warehouses.
Operational impact (£m) (HMRC or other)
This measure will support existing compliance work and there will be no additional costs.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
There is guidance on the use of this power and officers are trained in how to conduct visits. It includes the limitations of the power, ensuring its use is proportionate and necessary to control goods and protect the revenue.
Further advice
If you have any questions about this change, please contact Karen Rourke on Telephone: 03000 593525 or email: karen.rourke@hmrc.gsi.gov.uk.