There are different penalties that HM Revenue & Customs (HMRC) officers can issue for fraudulent paperwork or evading duty.
HMRC will not normally prosecute in the criminal courts where a person has been invited to co-operate with their investigation, but they reserve the right to do so.
Customs civil evasion penalties
Customs civil evasion penalties (CCEPs) for breaches of European Union and UK customs law were introduced in the Finance Act 2003. They are levied where HMRC has reasonable grounds to believe that customs duties or import VAT has been evaded or sought to be evaded.
Traders may face a CCEP if HMRC are satisfied that duty and/or import VAT has been evaded and dishonest conduct can be established.
The duties and relevant taxes covered by CCEPs include:
UK customs duty
EU customs duty
customs duties in the agricultural sector
A CCEP may be imposed by HMRC when it is satisfied that a trader has evaded the payment of a relevant tax and duty or if they have claimed any repayment rebate, drawback, relief, exemption or allowance to which they are not entitled.
The amount of penalty payable is calculated as a percentage of the duty and/or import VAT that has been evaded. If traders co-operate fully in the investigation, the amount of penalty payable may be reduced. An early and honest admission of the true extent of the evasion may attract a considerable reduction.
These procedures do not affect HMRC's ability to seize goods. In normal circumstances a trader will be able to reclaim seized goods when they have paid the CCEP and the duty and import VAT that is due. Read more about customs seizures.
CCEPs do not apply to offences involving prohibited or restricted goods. In these instances, criminal proceedings will be taken. Read more about prohibited and restricted goods.