Following representations from the United Kingdom Warehousing Association (UKWA), Her Majesty’s Revenue & Customs (HMRC) has just announced an ‘internal review’ of the way sanctions are applied within excise law to companies operating in the excise goods supply chain.
UKWA has argued that logistics service businesses – including third party warehouse keepers and hauliers – risk incurring duty assessments and huge related penalties if they make a simple procedural error relating to ‘duty-suspended’ excise goods that they may store or distribute on behalf of their clients.
Alan Powell, UKWA’s advisor on excise matters, explains: “We identified significant dangers in the law introduced in 2010 that can result in honest businesses being assessed for duty as a result of a genuine minor error in the duty-suspended supply chain – literally ‘ticking the wrong box.’ Such duty becomes a cost to the business in the form of double taxation or a de facto penal levy, for example when duty is assessed due to an ‘irregularity’ on exported goods that no longer subsist in the UK or EU. By ticking the ‘wrong box’ while goods are under duty suspense – whether in production, holding or movement – a company effectively creates a ‘duty point’ and if duty is not paid at that time, a liability of up to 100% will be incurred for ‘holding’ duty-unpaid goods.”
Powell adds “As UK law currently stands, legitimate businesses are facing massive risks of ‘unfair taxation’ for each and every minor genuine error during transactions, together with associated penalties. Meanwhile, those who actively seek to cheat the revenue by ‘committing irregularities’ in the supply chain continue to flourish almost unhindered.”
Powell points out that, in fairness to HMRC, there has been concern within sections of the Department for some time that the current sanctions may be disproportionate and have unintended consequences.
Prior to the review being announced, Powell was invited by HMRC Policy Officials to discuss industry concerns and problems with the law he had identified and brought to their attention. Most of those concerns have been identified as themes within the draft terms of reference of the review.
Alan Powell adds: “What we would like to see is a formal mechanism for HMRC to be able to remit duty in cases of irregularities caused by genuine error where the relevant products have been secured in a tax warehouse or there is proof of export. Without such assurance, we believe UK law breaches the principle of proportionality and fundamental rights and, consequently, excise businesses face being taxed and penalized out of existence for genuine errors that involve no material revenue risk. Then who would legitimately collect and pay the £40 odd billion excise duties to the Exchequer per year?”
The findings of HMRC’s review will be published on March 31, 2014. UKWA believes it is crucial for the excise industry to engage with HMRC to emphatically make its concerns known and the serious consequences to business of the law remaining in its current state.
Jan 24, 2021 Comments Off on Warehouse & Supply Chain Management software expert Principal Logistics Technologies acquires ERP & WMS solutions specialist Brentech Data Systems
Jan 17, 2021 Comments Off on Investment in New European Warehouse for CMP
Jan 17, 2021 Comments Off on James Jones & Sons pallets support deliveries of Covid-19 vaccine
Jul 07, 2019 Comments Off on tesa packaging tape brings food storage in from the cold
May 13, 2018 Comments Off on Yale Europe Materials Handling expands tow tractor range
May 11, 2018 Comments Off on How will Brexit affect the Supply Chain & Logistics Industries?
Nov 14, 2020 Comments Off on New Modulean Lite shadow boards from BeaverswoodImproved organisation of workplace tools is in warehouse and logistics centres is provided with new Modulean Lite shadow boards from workplace visual communication solutions specialist,...
Sep 13, 2020 Comments Off on Hyster Europe expands its range of electric counterbalance lift trucks
Aug 09, 2020 Comments Off on Linde Training Solutions – Well Trained Without Fail
Aug 03, 2020 Comments Off on Warehouse Strategy, Design & Operation for a Post-Covid-19 World
Nov 22, 2020 Comments Off on Axial Properties Ltd fined €80,000 following serious incident in Clonee warehouseOn Friday 20th November, at Trim Circuit Court, Judge Martina Baxter imposed a fine of €80,000 on Axial Properties Ltd following a serious incident at one of their warehouses in Bracetown...
Nov 14, 2020 Comments Off on New Modulean Lite shadow boards from Beaverswood
May 31, 2020 Comments Off on A-SAFE launches new hygiene partition for industrial facilities
Mar 25, 2020 Comments Off on Hospitality casualties could join warehousing workforce says UKWA