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HMRC internal manual

Customs Civil Penalties Guidance

Customs Civil Penalties Guidance: right to be heard

In situations where we are considering charging a penalty we must contact the trader explaining our position in full. This gives the trader a chance to make any comments before we make our final decision.

This is standard required practice across HMRC when a decision is going to require the trader to make payment. In other duties and taxes the practice often involves issuing a “pre-assessment letter” or a “penalty explanation letter”.

In customs this process is referred to as giving the trader the “Right to be Heard” (RTBH). RTBH is a general principle of EC Law and is supported by both case law and the European Commission.

If the trader is not UK based and their representative in the UK is not a named official of the company or someone they have appointed to act on their behalf, then that representative must obtain a letter of authority to act, from an overseas Officer of the Company before we discuss any penalty action with them or issue a RTBH.

Warning letters

We do not usually apply the RTBH before the issue of a Civil Penalty Warning Letter (CPWL) as the CPWL will not require any payment.

However, for one type of contravention - Reason Code 230/530: failure to produce records or information - the RTBH is included in the CPWL. You should follow the guidance at CCPG22500 where a trader fails to provide the required records/information within the time limit.

Penalty notices

If we establish that there is a contravention which will lead to a Customs Civil Penalty being charged we must give the trader the RTBH before we issue the Penalty Notice.

This can either be given in writing or verbally. If we decide to give a verbal RTBH we must make sure that we take and retain detailed notes of the trader’s comments. Should the case progress to tribunal we may be cross examined over the exact exchange between us and the trader at the time of giving the verbal RTBH message.