13/03/09: M&R Tax Advisers Victory on Behalf of Excise Bonded Warehouse

M&R Tax Advisers have recently acted on behalf of a well-established excise bonded warehouse in relation to the seizure by HMRC of alcohol and the raising of a civil penalty running into thousands of pounds for alleged breaches of the warehousing regulations. The alleged breaches related to the failure to mark with a rotation number individual loads stored in the warehouse to enable identification in stock records; and the lack of safe and easy access to the stock. Unusually in our experience, HMRC made the release from seizure of the goods contingent upon the payment of the civil penalty.

The loads concerned had a value in the region of £1.2 million. HMRC’s actions in seizing the stock caused our client, the bonded warehouse, considerable commercial and financial difficulties. Our client therefore took the commercial decision to pay the civil penalty in order to secure the release from seizure of the relevant stock. However our client neither accepted the legality of the seizure nor the validity of the decision to raise the civil penalty against it.

In acting for our client, we raised a series of relevant points and arguments in requesting first, a local reconsideration by the relevant HMRC Officer of the decisions both to seize the goods and to raise the civil penalty (albeit the goods had by now been restored following the payment of the civil penalty); and secondly, an independent formal Departmental review of these decisions after they had been maintained by the local Officer. Having reviewed the warehousing regulations upon which HMRC relied, we disputed the legal basis of both the seizure and how the release from seizure of the goods could be made contingent upon the payment of the civil penalty.

HMRC have been persuaded by M&R Tax Advisers’ arguments and the civil penalty in dispute has now been withdrawn by HMRC.  The civil penalty payment previously made by our client has been refunded.

Please contact us if you consider that we can be of assistance to you in any issue arising with HMRC.