When and how HMRC raises assessments, applies penalties and charges interest.
If you have not declared Beer, Wine or Cider Duty correctly we will send you an assessment. If your actual figures are not available we will consider all the facts and make a decision about how much duty you owe.
We assess errors made in accounting periods that ended 4 years ago or less. In cases involving fraud or dishonesty, we may extend the period we assess to 20 years.
We will issue an assessment if either:
- you do not submit returns
- your returns look incomplete or inaccurate because:
- you have not kept or produced any records
- your accounts and records look incomplete or inaccurate
There are strict time limits to issue assessments, these are within:
- 1 year of us having enough facts to make an assessment
- 4 years of you becoming liable for duty
We will extend this to 20 years in cases of dishonesty.
You must pay an assessment of duty immediately. We will recover assessments as a debt if you do not.
Penalties and interest
Appeal against a penalty
If you have got a reasonable excuse for making a mistake, HMRC will look at your case. You will not have to pay some or all of the penalty if we agree with you.
Interest on unpaid duty
We will charge interest on the whole amount we assess if we make an assessment of duty because:
- you did not declare enough duty on a return
- a previous assessment of duty was too low
We will apply interest from the date that a return is due to the date you pay the assessed amount.
Paying you interest
If you pay too much duty because of our mistake, we’ll repay you. We will also pay interest to you for the applicable period.
Types of penalties
There is a fixed penalty of £250 for failure:
- to notify a change in the business, for example, address
- of a fiscal representative to tell HMRC about their appointment
- to provide security if you’re asked to
- to send a return by the due date
- to keep or produce accounts
- to comply with conditions of registration
- to comply with the relevant regulations
There are 2 types of geared penalty.
5% of duty involved in the offence or £250, whichever is more
We apply this penalty when you do not pay the full amount of duty you owe by the due date.
Up to 100% of the duty you owe
We apply this penalty if you:
- do not tell us about your liability to hold an excise licence
- make errors or inaccuracies in returns or documents
- evade duty
We may apply a penalty of up to 30% of potential lost revenue if we have sent you an assessment that is not enough, and you do not tell us.
If you breach the Controlled Goods Agreement, we may charge 50% of the unpaid duty or penalty that gave rise to taking control of goods.
Daily penalties apply if you do not:
- produce records
- pay duty on time
- send a return on time
We will issue a daily penalty if we have already issued a fixed or geared penalty for the same offence. The daily penalty is £20 a day for each day the offence continues.
We may need you to provide a security payment of the duty as a condition of carrying out taxable activities. The amount of the security will be proportionate to the amount of duty we estimate to be at risk.
You are liable to penalty interest on the amount involved if you do not pay:
- the duty due on a return or any assessed duty
- a penalty
- any interest on time
Mitigating penalties and interest
We can mitigate penalties and penalty interest, but not the interest itself. In the case of penalty interest a reasonable excuse is a mitigating factor. When considering mitigation of penalties or establishing a reasonable excuse for the mitigation of penalty interest the following cannot be taken into account:
- insufficient funds to pay the duty, penalty or penalty interest due
- little or no loss of duty
- whether the person liable to the penalty or the person acting on their behalf has acted in good faith
If you disagree with our decision
When we make a decision that you can appeal against, we will tell you and offer you a review. We will explain the decision and tell you what you need to do if you disagree. For example with:
- the amount of an assessment
- the issue of a civil penalty
- a decision specifically connected to the duty
Within 30 days you can:
- send new information or arguments to the officer you have been dealing with
- have your case:
- reviewed by a different officer
- heard by an independent tribunal
A different officer will handle the review from the one who made the decision. If you prefer to have an independent tribunal hear your case, write to the tribunals service.
Time limit to ask for a review
If you want us to review a decision, you must write to the person who issued the decision letter within 30 days of the date of that letter.
We will complete our review within 45 days unless we agree another time with you.
You cannot ask the tribunal to hear your case until the 45 days (or the time we agreed with you) has expired, or we’ve told you the outcome of the review.
If you are not satisfied with the review’s conclusion, you have 30 days to ask the tribunal to hear your case.
If we cannot finish our review within 45 days, or any time we agreed with you, we will ask you whether you are willing to agree to an extension. If you do not agree to an extension, the original decision is upheld.
We will write and tell you this. You then have 30 days from the date of that letter to ask the tribunal to hear your case.
What to include when you ask for a review
Your request should state the full details of your case, the reasons why you disagree with us and give any supporting documentation. You should also tell us what result you expect from our review.
If you do not want a review
If you do not want a review, you may appeal to the independent tribunal. You need to send your appeal to the tribunals service within 30 days of the date on the decision letter.