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HMRC internal manual

Holding and Movements Alcohol Strategy - Audit Risk & PERCET

HM Revenue & Customs
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Selecting Assurance Events: How else will assurance events be generated?


Mutual Assistance References

Since 1st July 2005, when the excise Mutual Assistance Regulation 2073/2004 came intoforce, each Member State is legally required to provide a response to MA requests within90 days of receipt. Except where requests are unreasonable you will be expected to actupon these requests as they are received, regardless of whether you consider the requestto represent a risk. The UK Liaison Department in Glasgow will forward MA requests throughto Risk Teams for immediate issue.

Revenue Fraud Detection Team (RFDT) References

Where agreed, high-risk references will be issued directly to nominated officers andcopied to Risk Managers and CRMs within LBS. Other references should be periodicallybatched and sent through to the Risk Team or CRM by the RFDT for risk analysis andappropriate action as part of regular assurance activity. Batching up references will helpofficers and risk teams to examine the activity of traders over a period of time, andidentify potential high risk activity requiring further action to be implemented (e.g.Commissioners Directions requiring duty payment where imported goods are regularlyre-exported within very short timescales).

National / Regional Assurance Projects

Assurance events of this type may be very specific, but can be expected to involve fullcredibility challenges of traders and their supply chains. It is likely that SeniorOfficer (SO) Assurance Managers will be directly involved in the planning of these, aswell as their delivery. National Assurance Projects will have the backing of the AlcoholStrategy Delivery Group (ASDG) and must be seen as a priority.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Low Risk Selections

Occasionally, traders thought to pose a low risk will be selected for assuranceactivity. This will be done to test the risks within the wider trader population, and alsoto test the assumptions and information held within the risk matrix itself. Experiencewith alcohol traders has shown that high-risk traders will typically introduce previouslyunknown traders (or “clean skins”) into their supply chains. These traders oftenhave no previous involvement with alcohol (sometimes hinted at by their trading names),and may have a reasonably good compliance history for VAT. Their VAT trade class onDepartmental systems may well be unrelated to excise activity. These traders may then beused to create fictitious chains, to introduce diverted or smuggled alcohol intomainstream supply chains. These traders make the assurance of supply chains morecomplicated, and can also provide a safety barrier for high- risk traders between them andHMRC and, crucially, between them and any obvious liability to pay excise duty.