Options for addressing a contravention: issue a penalty
One of the approaches available to us when we find a contravention of customs provisions is to issue a penalty to the trader. In most cases, we issue a warning letter first but there are occasions when we may go direct to penalty, see CCPG23550.
A customs civil penalty (CCP) is charged through the issue of a penalty notice. The penalty notice also serves as a warning that, if the trader commits another broadly similar contravention within the next 2 years, we may issue a further penalty without warning.
A broadly similar contravention is one that contravenes similar provisions to those covered by the warning letter or previous penalty notice.
Whether we issue one or multiple penalties as a result of errors found on an audit depends on the circumstances.
- If we find more than one contravention, all for the same reason code and under the same regime, caused by Poor Compliance, then we normally group those together and charge one penalty.
- Where a trader operates several different customs regimes and there are contraventions under the same reason code, across more than one of those regimes, through Poor Compliance, we must issue a penalty for each regime. We do this by issuing one penalty notice for each reason code, setting out the legislation and the total amount of penalties for that reason code. State that the amount relates to P1 (Penalty1) to PXX [enter however many there are]. Then in the description on the next page list the individual regimes and how the contravention applies to each.
- If the tax element of the debt exceeds £10,000 and if broadly similar contraventions have already been found on audit within the last three years and a letter of written instruction was issued the first time, you would consider issuing a penalty for every instance of the same contravention as these would be classed as a Serious Error, see CCPG22300.
Note: There is a maximum of £25,000 on the total value of penalties (per site) we can issue as a result of a single compliance check.
Consider a case where there are five contraventions. The table below explains whether one or more penalties would be appropriate, depending on the number of reason codes and regimes and the type of contravention. It shows how many penalty notices should be issued in each scenario.
|Number of Contraventions||Reason Code (R/C)||Regimes||Type of contravention||Number of penalties and notices|
|5||Same R/C||Same regime||Poor Compliance||1 penalty and 1 notice|
|5||3R/C||Same regime||Poor Compliance||3 penalties and 3 notices|
|5||Same R/C||3 different regimes||Poor Compliance||3 penalties and 1 notice|
|5||Same R/C||Same regime||Serious Error where debt exceeds £10 000||5 penalties and 1 notice|
See CCPG27000 for detailed operational guidance on
- the points to be considered in deciding whether a penalty is appropriate,
- deciding the amount of a penalty,
- mitigation of a penalty,
- authorisation of a penalty,
- the actions to be taken to issue a penalty notice, and
- issuing more than one penalty notice at the same time.
You must complete a Customs Penalty Action Checklist (CPAC) for any decision you make about a contravention. You must have your decision agreed by your manager.