Recent decisions of the English courts have cast confusion over the circumstances when a lorry driver can be personally liable for unpaid excise duty on the goods they are carrying into the UK. This is particularly difficult for lorry drivers who innocently carry goods into the UK without knowing that there is unpaid duty owing.
The English rules are set out in Regulation 13 of the Excise Goods (Holding, Movement and Duty Point) Regulations 2010, which implements a European Directive. Regulation 13 provides a mechanism for HM Revenue & Customs (HMRC, the UK tax collecting agency) to recover unpaid excise duty and is a vital tool used by HMRC against smuggled goods.
Under the Regulations, HMRC can seek recovery from either:
- the person making the delivery
- the person holding the goods
- the recipient of the goods liable to pay the duty
This gives HMRC the choice as to who to pursue for the unpaid excise duty. Historically, HMRC tended to leave lorry drivers alone and pursue people further down the supply chain instead.
In Taylor & Wood [2013] the Court of Appeal supported this approach when it decided that “to seek to impose liability on [the parties] who had actual possession [of the goods] at the excise duty point but were no than innocent agents, would raise serious questions of compatibility with the objectives of the legislation”. This has been supported by the case of B&M Retail v HMRC [2014] and other cases where it has been held that drivers were merely innocent couriers, and were not “holding” the goods.
However, in the case of McPeake [2014] the first instance court found that a lorry driver was liable for unpaid excise duty as the person “holding” the goods intended for delivery. HMRC successfully argued that the lorry driver was capable of “holding” goods as he was unsupervised, not subject to the control of any other person, and had responsibility for the goods.
Both McPeake and B&M Retail are subject to appeal to the Upper Tribunal which hopefully will provide clarity and settle the interpretation of Regulation 13.
In the meantime, lorry drivers and hauliers companies employing them should minimalise the risk of falling foul of Regulation 13 by ensuing that:
- they have assessed risks and carried out relevant checks
- they know where the goods are going and who the consignor and consignee are
- they have all necessary documentation
Where seizure occurs, it is important to act quickly as there are strict time limits in which such decisions can be challenged.
For further advice on managing the risk, or advice on how to respond if your vehicle has been stopped by the UK Border Force, please contact Katarzyna Boguslawska.
