Penalty notice: deciding the amount of a penalty: setting penalty amounts
Normally we set a first penalty at £250 per contravention. This is the minimum penalty amount before any mitigation.
However, we may set a higher first penalty
- Where the duty (customs duty and/or sticking VAT) is £50,000 or more we may consider setting a first penalty of £1,000.
- Where the duty or tax is above £100,000 we may consider setting a first penalty at the maximum amount for the contravention.
- Where the contravention has a particularly serious or detrimental effect on the control of goods, we may consider setting a first penalty of a minimum of £1,000.
- Where the contravention, although not generating a revenue loss, has led to a breach of the “security” measures we may consider setting a first penalty higher than the minimum. (For example, exporting a product that is illegal in the country of destination.)
The maximum penalty amount is either £1,000 or £2,500 as set out in the Schedules of contravention, see CCPG11010.
If there are subsequent broadly similar contraventions within two years, we should increase the penalty in steps until the maximum amount is reached. The intermediate steps are usually
- £500 for a second contravention
- £1,000 for a third contravention (this will be the maximum for some contraventions)
- £2,000 for a fourth contravention, and
- £2,500 for subsequent penalties.
These are recommended amounts. However, we will determine the amount of the penalty having considered the circumstances, including the level of previous penalties for the same contravention, considering whether there are grounds for mitigation, the trader’s attitude to compliance and also the detail of any corrective action the trader may have taken to improve compliance.
Note: that there is a cap of £25,000 on the total value of penalties (per site) we can issue as a result of a single compliance check.
Where the trader is dealt with by the Large Business (LB) or in Local Compliance, Mid-Size Business (MSB) we must discuss the penalty amount with the Customer Relationship Manager (CRM) and obtain their approval. This should be recorded on the Customs Penalty Action Checklist (CPAC).