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HMRC internal manual

Holding and Movements Assurance Guidance

From
HM Revenue & Customs
Updated
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Excise Movement and Control System: assurance checks: possible sanctions for non-compliance with fallback procedures

Misuse of fallback procedures may result in one or more of the following actions:

  • forfeiture of the goods, regulation 88 of HMDP 
  • civil penalty, regulation 89 & Schedule 1 of HMDP 
  • assessment of the duty

    • when goods leave a duty suspension arrangement regulations 5 and 6(1)(a) of HMDP provides the duty point and Regulation 8 specifies the person or persons liable to pay, or
    • where there is a contravention of a specified movement condition under regulation 19, Regulations 19(6), 19(7) and 19(8) provide the duty point and person liable to pay)
  • consideration to revoke the consignor’s or consignee’s authorisation to occupy a warehouse - regulation 4 of WOWGR 1999 (in accordance with s100G(5) of CEMA 1979).
  • consideration to revoke a Registered Consignors approval - s100G(5) of CEMA 1979.

The table below shows the possible actions that may be taken if any of the scenarios identified earlier in the ‘Risks associated with fallback procedures’ occur.

Contravention / failure to comply Forfeiture of goods (reg 88 HMDP) Civil penalty Assessment Consider revocation of approval
         
Trader has attempted to circumvent EMCS by using fallback procedures when there is no genuine problem with either EMCS or their IT system. Yes. Contravention of reg 41(2) 57(2) of HMDP  Yes. Reg 89 & Sch 1 of HMDP if a failure to comply with either reg 41(2) or 57(2) of HMDP  Yes. Reg 19 of HMDP  Yes
Trader has not notified HMRC that they are dispatching a movement in fallback. Yes. Contravention of reg 50(2)(a) or Reg 60(2)(a) of HMDP  Yes. Reg 89 & Sch 1 of HMDP  Yes. Reg 19(2)(b) or Reg 19(3)(b) of HMDP  Yes
Trader has not completed the FAD correctly or kept a copy of the document with the goods. Yes. Contravention of reg 50(2)(b) or Reg 60(2)(b) of HMDP  Yes. Reg 89 & Sch 1 of HMDP  Yes. Reg 19(2)(b) or Reg 19(3)(b) of HMDP  Yes
Trader has not captured the fallback movement retrospectively on EMCS. Yes. Contravention of reg 50(4) or reg 60(4) of HMDP  Yes. Reg 89 & Sch 1 of HMDP  Yes. Reg 6(1)(a) and reg 7(1)(i) of HMDP  Yes
Trader has omitted or altered details of the movement when it was captured retrospectively on EMCS, for example omitted product lines or reduced quantities Yes. Contravention of reg 50(4) or reg 60(4) of HMDP  Yes. Reg 89 & Sch 1 of HMDP  Yes. Reg 6(1)(a) and reg 7(1)(i) of HMDP  Yes
Trader has not notified HMRC that they are changing a destination or splitting a consignment in fallback. Yes. Contravention of reg 51(1), 51(3) or 60A(1) of HMDP  Yes. Reg 89 & Sch 1 of HMDP  Yes. Reg 6(1)(a) and reg 7(1)(i) of HMDP  Yes
Trader has not captured the CoD or split of energy products retrospectively on EMCS as soon as possible. Yes. Contravention of reg 51(2), 51(4) or 60A(2) of HMDP.  Yes. Reg 89 & Sch 1 of HMDP  Yes. Reg 6(1)(a) and Reg 7(1)(i) of HMDP  Yes

When considering a revocation of the approval, CEMA 79, section 100G(5) states that there should be reasonable cause. Therefore, officers should consider a stepped approach:

  • First offence: educate the trader by explaining what they did wrong and what they should have done. Officers should issue a letter confirming this and record their actions on Caseflow. Is assessment action appropriate?
  • Second offence: issue a warning letter that a further offence may result in revocation of their approval to trade under duty suspension arrangements. Is penalty action appropriate?
  • Third offence: revoking an approval but officers should consider proportionality here. If all three offences were minor, and resulted in no actual risk to the revenue, would revocation be appropriate?

Officers should refer to HMAG60620 to request supporting information from the NSD to help establish that fallback procedures are now being followed correctly.