Tobacco and Personal Use: The Assessment and Penalty

Joshua Carey was instructed by HMRC against an Appellant who received an assessment and a penalty for holding excise duty goods which were not duty paid.

The Appellant was travelling back into the United Kingdom from Bruges having stockpiled 5kg of hand-rolling tobacco said to be for personal use and gifts for his family.  He was stopped at the border and declined to be interviewed because he was part of a tour group and he was concerned that the bus would depart without him. He also refused to sign the officer’s notebook. As a consequence the goods were seized.

The Appellant received information by post about how he could challenge condemnation proceedings should he wish to. He did not pursue this and ultimately received an excise assessment for unpaid duty on the tobacco and a penalty for holding goods which were not duty paid. He appealed the assessment and penalty to the First-tier Tribunal (Tax Chamber) where he argued that he was treated differently to other passengers who were let through immigration and customs clearance without difficulty. He also argued that the goods were for personal use and therefore he should not have to pay the excise assessment or penalty.

The Tribunal found that as the Appellant had failed to challenge the condemnation of the goods, the First-tier Tribunal (Tax Chamber) had no jurisdiction to go behind the seizure. It went on to find that the penalty could only be mitigated if there were special circumstances to warrant a reduction or there was a reasonable excuse. The Tribunal accepted Mr Carey’s submission that there were no “exceptional, abnormal or unusual” events which would permit special reduction. Equally, it implicitly applied the Upper Tribunal (Tax and Chancery Chamber)’s decision of Christine Perrin (where Mr Carey also represented HMRC) and found that there was no reasonable excuse when judging what the Appellant did against the reasonable taxpayer in the position of the Appellant.

Joshua was instructed by Tracy Morrell of HMRC.