beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Customs Civil Penalties Guidance

Introduction: overview of Customs Civil Penalties (CCP)

Customs Civil Penalties (CCP) were introduced by Sections 24 to 41 of the Finance Act 2003. There are two types of CCP: a Civil Evasion Penalty and a Civil Penalty. This guidance covers Civil Penalties. You can find out more about Civil Evasion in (This content has been withheld because of exemptions in the Freedom of Information Act 2000) Public Notice 300.

The Customs Civil Penalty statutory provisions are set out in:

  • Part 3 of the Finance Act 2003 and
  • The Customs (Contravention of a Relevant Rule) Regulations 2003 as amended
  • The Export (Penalty) Regulations 2003 as amended.

The Statutory Instruments include Schedules for both imports and exports which provide the detail of the various types of contraventions of customs law that can be penalised using CCP.

You can find copies of these schedules at Customs Civil Penalties (GOV.UK website).

HMRC are responsible for encouraging and checking trader compliance with the customs provisions.

Additionally, Border Force takes CCP action at ports and airports where contraventions of customs law may occur. Border Force also takes CCP action on board ships and also undertakes frontier examinations which will cover Freight Sheds and Postal Packets.

Any errors identified on a customs declaration for import or export are deemed to be a contravention of customs law.

Contraventions of customs provisions include

  • infringements of customs regulations
  • failures to comply with the terms of customs authorisations
  • misdeclarations
  • failure to comply with customs procedure
  • failure to produce information, and
  • unauthorised removal of goods from Customs Control.

Where we identify a contravention of customs law, HMRC has the discretion to take CCP action. Civil Penalties are not intended to penalise a trader who is trying to be compliant.

The issue of a penalty for contraventions in no way implies dishonesty on the part of the recipient.

The CCP action we take depends on the circumstances surrounding the contravention and the trader’s compliance history or attitude towards compliance. We consider which approach is most likely to achieve future compliance. Our options are

  • Issue a Civil Penalty Warning Letter (CPWL) outlining the detail of the contravention(s) and the corrective action the trader needs to take to improve compliance. This letter also advises that if a further broadly similar contravention happens within a two year period we will consider issuing a Civil Penalty.
  • Apply a penalty immediately by issuing a Penalty Notice.
  • Recommend amending or revoking the trader’s authorisation
  • Where a trader is new to a regime or process, provide education to the trader and confirm this in a letter of written instruction.
  • Take no further action.

We cannot issue a warning letter or charge a penalty if the person has a reasonable excuse for the contravention.

Before considering CCP action, we must establish whether the trader has a reasonable excuse for their action by asking appropriate questions. If the person doesn’t provide a reasonable excuse until after we have issued a CPWL or penalty notice, we will withdraw them. Whilst we would withdraw the CCP action, we would still send a letter of written instruction to the trader to advise that whilst on this occasion CCP action was not deemed appropriate we are advising them of the corrective steps they need to take to ensure compliance in future.

Where we consider that a penalty is appropriate, we decide

  • the amount of the penalty,
  • whether there should be any mitigation (reduction) of the penalty, and
  • if so, how much.

Right to be Heard

We must comply with Right to be heard (RTBH) rules when issuing a penalty notice as these are adverse decisions.

Please note that when issuing a warning letter for a Reason Code 230/530 contravention this warning letter should include the Right to be Heard (RTBH) and inform the trader that if the records are not produced by the specified date a Civil Penalty will be issued.

Appeal and review rights

A person can appeal against any warning letter, penalty or review decision we make.

We can also re-consider any warning letter or penalty in the light of new information that becomes available about the contravention, whether that happens before we issue a warning letter or penalty notice or afterwards.