Kent Couriers Limited v The Commissioners for HMRC

Kent Couriers Limited v The Commissioners for HMRC

The Appellant was not 'holding' the alcohol nor 'making the delivery' at the excise duty point, as it lacked physical possession and de facto control, and its legal control was highly circumscribed. Therefore, it was not liable for the excise duty. However, the Appellant was 'concerned in dealing with the goods' for wrongdoing penalty purposes, and did not have a reasonable excuse due to failure to conduct due diligence on an unknown customer, despite lack of knowledge of the smuggling. The penalty was reduced to the statutory minimum due to the quality of disclosure.

Parties
Appellant: Kent Couriers Limited; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
11 October 2024
Procedural Posture
Tax Appeal / First Tier Tribunal Judgment
Outcome
Appeal against excise duty assessment allowed; appeal against wrongdoing penalty dismissed but penalty reduced.
Legal Topics
Excise Duty Liability, Wrongdoing Penalty, Reasonable Excuse, Legal Control Vs Physical Possession, Disclosure Quality in Penalty Assessment
Tax Law Excise Duty Excise Duty Liability Wrongdoing Penalty Reasonable Excuse Legal Control Vs Physical Possession Disclosure Quality in Penalty Assessment

Case Brief

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Parties

Kent Couriers Limited

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Judgment

Legal Issues

  1. 1 Whether the Appellant was 'holding' alcohol at the excise duty point under Regulation 13 of the Excise Goods (Holding, Movement and Duty Point) Regulations 2010 and Article 33 of Directive 2008/118/EC
  2. 2 Whether the Appellant was liable to a wrongdoing penalty under Schedule 41 to the Finance Act 2008

Ratio Decidendi

The Appellant was not 'holding' the alcohol nor 'making the delivery' at the excise duty point, as it lacked physical possession and de facto control, and its legal control was highly circumscribed. Therefore, it was not liable for the excise duty. However, the Appellant was 'concerned in dealing with the goods' for wrongdoing penalty purposes, and did not have a reasonable excuse due to failure to conduct due diligence on an unknown customer, despite lack of knowledge of the smuggling. The penalty was reduced to the statutory minimum due to the quality of disclosure.

Court Disposition

Appeal against excise duty assessment allowed; appeal against wrongdoing penalty dismissed but penalty reduced.

Orders

  • Excise duty assessment quashed; Appellant not liable for excise duty.
  • Wrongdoing penalty affirmed but reduced to £7,235.20.