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HMRC internal manual

Customs Civil Penalties Guidance

Classifying the category of contraventions: deficiencies in systems, records, security of premises etc

What is a deficiency

A trader has a legal obligation to record and maintain information relating to their international trade activity. They must have systems in place to check the accuracy of information declared to Customs Authorities and ensure compliance with the regime or procedure used

Deficiencies are easy to identify where an Approval or Authorisation is in place.

A condition of an Approval or Authorisation is that the trader agrees to maintain systems, records or an appropriate level of security. The failure to do may:

  • endanger timely and correct payment of duties
  • make it difficult to check that all goods have been correctly accounted for
  • lead to the illicit removal of goods from secure premises.

When you  identify different types of contraventions in your compliance check you must consider whether there are deficiencies in:

  • a trader’s systems
  • a trader’s records
  • the security of premises.

When you find a deficiency

The options for addressing a contravention are set out in CCPG23100.

You should consider the impact of the deficiency:

  • if minimal, your action may be limited to sending a letter of written instruction after the visit to rectify the shortcomings
  • If significant, you can issue a warning letter or penalty, see CCPG26000. If you issue a R/C 231 civil penalty warning letter (CPWL) or a penalty as a result of a deficiency in systems, you should give the trader time to rectify the problem.

The trader should rectify the deficiency within 6 months unless you decide there are exceptional circumstances. The trader must write to us to confirm that the deficiency has been rectified.

When we take Civil Penalty action for deficiencies in systems give the trader a compliance rating of 8 to ensure a follow up visit is undertaken within 12-18 months.