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HMRC internal manual

Holding and Movements Assurance Guidance

Registration and approval: General information

The processing and control procedures described throughout this guidance are generally common to all the trader types listed at HMAG30400. However, where a process or control is unique to a particular trader type this is stipulated within the guidance.

Where the law provides the discretion, only suitable applications (so called ‘fit and proper’ persons) to carry on an excise business should be approved.

There is always a potential revenue risk in approving anyone to hold, move, receive or deal with goods in excise duty suspension or in approving persons wanting to receive goods which have already been released for consumption in another Member State (often referred to as ‘duty-paid’ goods). The potential revenue risk in applications must be established and considered before any approval is sanctioned. As such, our policy is to robustly challenge all new applications received.

For these trader types, the law provides us with the discretion and power to:

  • decide whether or not to approve / authorise; and
  • place, where necessary, specific conditions and/or restrictions on the approval / authorisation to address specific risk.

Where we have granted approval, we should continue to monitor that business in order to be satisfied that the business approved or registered continues to meet the ‘fit and proper’ test.

Fit and proper test

The term ‘fit and proper’ suggests that to be deemed suitable for registration and approval, applicants must meet or exceed a particular level of suitability, compliance and integrity in how they conduct, or appear likely to conduct, their tax affairs with HMRC. The term has been used where traders have failed to address genuine compliance concerns or they have been shown to be involved with fraud or duty evasion. It also includes the potential revenue risk that an application represents. All applications must be considered against their overall suitability, including a judgement on whether what is known about any person or persons associated with the trader reasonably suggests a significant real or potential risk to the revenue.

Applications which fail to meet HMRC requirements must be rejected unless it is unreasonable to do so in the circumstances and after considering the available information.

The Commissioners are obliged to act reasonably and proportionately with respect to any condition, restriction or requirement. Officers are acting on behalf of the Commissioners and are also obliged to arrive at reasonable decisions given the information that they have available to consider in each case. In order to arrive at a reasonable decision, officers must be able to demonstrate that they have considered all the available facts and challenged these effectively before making their decision. Our policy on approvals/registration cannot be so inflexible that it prevents officers from considering each application on its merits and from reaching a decision that can be deemed to be reasonable.

This does not mean that a light touch must be applied to applications but that officers must consider and test all the information available to them and arrive at a sensible conclusion that, if necessary, can be clearly put before a review officer or Tribunal Chairman.

The current approval and authorisation requirements for new and existing traders are set out in the regulations and in Notices 196 (HMRC website), 203A (HMRC website) 204A (HMRCwebsite) and 204B (HMRC website). The main principles are that we will only approve premises and authorise persons as warehousekeepers, registered owners, duty representatives, registered consignors, registered consignees, temporary registered consignees, registered commercial importers or tax representatives where the applicant can demonstrate that they:

  • meet all HMRC’s requirements as set out in the legislation and relevant notices;
  • are a legitimate business with a genuine business need for approval;
  • will run their excise activities in a transparent way that will enable satisfactory audit and assurance of the onward supply chain by the relevant authorities;
  • can meet any throughput criteria (in the case of warehouse and warehousekeeper applications) so that their approval will not require unreasonable departmental resources to ensure that all duties are paid and administrative requirements met.