HMAG150251 - Excise duty points: excise wrongdoing penalties
Under paragraph 4 of Schedule 41 to the Finance Act 2008, anyone who is found handling excise goods (on which the excise duty has not been paid) after the excise duty point is liable to a wrongdoing penalty. You should therefore consider excise wrongdoing penalties alongside any action you are taking in respect of the different scenarios covered in this guidance.
Those liable to an excise wrongdoing penalty could include anyone who acquires possession of the goods or who is involved with the carrying, removing, depositing, keeping or otherwise dealing with those goods. In some cases, you may end up issuing several wrongdoing penalties because any number of person/s can be shown to be handling the excise goods after the duty point. You should not issue a wrongdoing penalty to anyone who has handled the goods before the excise duty point.
You should consider the action of every person liable to a wrongdoing penalty in isolation because each case will rest on the behaviour and action taken by that person. The penalty amount can be reduced in line with current legislation and policy. There is also a 'reasonable excuse' provision under this legislation.
When the behaviour of a person attracts an excise wrongdoing penalty under paragraph 4 of Schedule 41 to the Finance Act 2008 (handling goods subject to unpaid excise duty), the penalty is made and notified under paragraph 16 of Finance Act 2008.
Here are some examples when you should consider excise wrongdoing penalties.
Wrongdoing penalty: Irregularity during an excise duty-suspended movement
In practice where an irregularity occurs, or is detected, during an excise duty-suspended movement the person/s liable to a wrongdoing penalty will usually include those you have identified as participating in the irregularity. In addition, anyone else who is found to be handling those goods (on which the excise duty has not been paid) after the excise duty point is also liable to a wrongdoing penalty. This may include for example, anyone transporting those goods, the owner of the goods or the person receiving the goods.
Wrongdoing penalty: Goods held outside of a duty-suspension arrangement
In practice, where an assessment is made against a person for holding excise goods after the excise duty point (and the duty has not been paid or deferred), their action will usually attract a wrongdoing penalty. However, you may also find that others have been handling the excise goods (on which the excise duty has not been paid) after the excise duty point. As such, they are also liable to a wrongdoing penalty. This may include for example, anyone transporting goods or physically holding those goods after the duty point. However, you need to be aware of the boundaries when considering penalty action, particularly when a totally unconnected business is delivering goods for someone else and would not even be aware they are transporting unpaid excise goods.
This penalty is particularly useful where you identify an earlier time in the supply chain when a person was holding those goods outside of a duty-suspension arrangement.
Wrongdoing penalty: Cases involving private individuals
Where a person is liable to pay the duty under regulation 17 of the NI HMDP Regulations for bringing goods back to Northern Ireland for a commercial purpose, an excise wrongdoing penalty will normally be due.
Wrongdoing penalty: Illegal Importation of excise goods
Where a person is liable to pay the duty for illegally importing excise goods into the United Kingdom, an excise wrongdoing penalty will normally be due. This may capture the person who declares those goods or on whose behalf they are declared on importation. However, others including agents, owners and transporters may also be liable to an excise wrongdoing penalty if they are found to have been handling those goods after the excise duty point.
Further guidance on excise wrongdoing penalties can be found at CH90000 of the Compliance Handbook.