Provisions relating to detention and seizure: exceptions to notice requirement
Published 9 December 2015
© Crown copyright 2015
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This publication is available at https://www.gov.uk/government/publications/provisions-relating-to-detention-and-seizure-exceptions-to-notice-requirement/provisions-relating-to-detention-and-seizure-exceptions-to-notice-requirement
Who is likely to be affected
Individuals and businesses involved in the evasion of customs or excise duties on goods, or those bringing prohibited items into the UK.
General description of the measure
The new measure will amend paragraph 3(2) of Schedule 2A and paragraph 1(2) of Schedule 3 Customs and Excise Management Act (CEMA) 1979 so as to make explicit provision for an officer to treat a person who has, or appears to have, possession or control over a thing, at the point at which it is detained or seized, as if he or she were a representative of the owner of those goods.
HM Revenue and Customs (HMRC) has a duty to take robust action to deal with those who smuggle illicit goods of any description into the UK. The detention and seizure of goods, where it is suspected that duty has not been paid, is a valuable tool in the fight against duty evasion. The powers of detention and seizure are, in particular, key to HMRC’s excise strategy supporting the Alcohol and Tobacco Strategies.
Policy objective
This measure will make the operational activities of HMRC and Border Force officers more effective, reducing the resource required in trying to identify the owner, in what is usually a fraudulent, and potentially complex, supply chain. It will allow officers to treat the driver, or a person in a comparable situation, as if he or she were a representative of the owner and therefore reduce the risk of legal challenge from those who purport to be owners, claiming that they have not had the opportunity to provide the necessary information required to establish the duty status of the goods, or to exercise their right of appeal.
This amendment would ensure consistency of treatment at both seizure and detention, clarifying procedures for both officers and those from whom goods are detained or seized.
Background to the measure
In a number of instances goods have been seized under the customs and excise Acts by officers of HMRC or Border Force where the identity of the owner of the goods was unclear. In those situations the person present at the time of the seizure, e.g. the driver of the vehicle, has been treated by officers as a servant or agent of the owner of the goods and there was no requirement to give a Notice of Seizure. The interpretation of such a person as a servant or agent has been subject to legal challenge.
CEMA was drafted at a time when officers were dealing with straightforward smuggling. Now officers are dealing with sophisticated diversion fraud with the movement of goods, often through complex transactions, in which a number of persons are involved. It is not always easy for HMRC or Border Force officers to identify those who have an involvement in the attempt to evade what is usually, but not exclusively, excise duties on alcohol.
It is not uncommon for a detention or seizure to take place in the presence of a self-employed haulier, usually the driver of a motor vehicle, who then claims to be acting on behalf of another haulier. That haulier may be a middle-man for an unknown party and it is possible the actual driver of the vehicle may not know the identity of the owner of the goods, or may profess not to. Situations like this create an obvious difficulty for an officer to be certain whether or not that person is a “servant or agent” of the owner of the goods, or indeed who the actual owner of the goods is.
The owner of any goods seized will have the opportunity to appeal the seizure within the prescribed time limit.
Detailed proposal
Operative date
The amendments will have effect on the date of Royal Assent to Finance Bill 2016.
Current law
CEMA 1979, Schedule 2A and Schedule 3 to the Act.
Current law is contained in paragraph 3(2) of Schedule 2A for Notice of Detention and paragraph 1(2) of Schedule 3 for Notice of Seizure.
Proposed revisions
Legislation will be introduced in Finance Bill 2016 to amend paragraph 3(2) of Schedule 2A and paragraph 1(2) of Schedule 3 of CEMA.
The legislation reflects the introduction of a new provision whereby it is not necessary to give a notice of detention or a notice of seizure to any person who assumes possession or control over a thing at the time of the detention or seizure. This amendment will make it easier for officers involved in these activities.
Summary of impacts
Exchequer impact (£m)
| 2015 to 2016 | 2016 to 2017 | 2017 to 2018 | 2018 to 2019 | 2019 to 2020 | 2020 to 2021 |
|---|---|---|---|---|---|
| - | 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 economic impacts.
Impact on individuals, households and families
This measure is not expected to impact on individuals, households or family formation, stability or breakdown.
Equalities impacts
No equality impacts in relation to any protected characteristic have been identified in relation to these proposals.
Impact on business including civil society organisations
This measure is expected to have no impact on businesses and civil society organisations. Businesses will continue to be able to engage the appeal mechanism, but the changes are not expected to affect the likelihood of goods being wrongly seized or detained.
Operational impact (£m) (HMRC or other)
Costs will be negligible.
This measure will support the Alcohol and Tobacco Strategies.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
It is acknowledged that careful monitoring is needed to ensure broad equity of treatment. It is necessary, if the Commissioners (and, as appropriate Border Force) are to ensure proper compliance, and protect the revenue, that they are able to detain and seize goods in an effective manner. The proposals are not more than is necessary to ensure compliance and protection of the revenue.
The well-established appeal provisions will apply and will, by being brought within the Tribunal and Magistrates’ domain, be fully subject to judicial oversight.
Further advice
If you have any questions about this change, please contact Marilyn Seago on Telephone: 03000 593391 or email: marilyn.seago@hmrc.gsi.gov.uk.