Solicitor looks to challenge HMRC's detentions

Peter Hastings, a Partner with Rogers and Norton solicitors and specialist in claims involving HMRC (and its predecessors Customs and Excise and Inland Revenue) is calling for businesses within the alcohol and warehousing sectors and industries to contact him concerning their experiences with HMRC when HMRC have detained and/or seized goods. 

He also wants to hear from businesses who have been the subject of assessments leading to the insolvency of their business, and as a consequence inability to appeal the assessment.  Initially, Peter is considering mounting a challenge to HMRC's apparent power and ability to detain goods and stock without reasonable grounds for doing so, or without suspicion as to the legality of the goods i.e. whether Duty has been paid.  He is also concerned at how long goods are detained before being released or seized.

Peter has successfully acted for businesses in securing the release of stock valued at millions through the Courts, by Judicial Reviews and Injunctions.  He comments: - “I very recently advised a business whose entire stock valued in excess of £1million had been detained by HMRC, whilst HMRC investigated the Duty status of the stock. This detention put the business and its employees' jobs at risk.  It was eventually released. I am now acting for another business whose entire stock has been detained, again pending an investigation. There are no apparent suspicions for believing that Duty has not been paid; HMRC are investigating the “chain” and 6 weeks after the detention, no progress appears to have been made. My client has had to make redundancies, even though there is no suggestion or evidence that my client has acted unlawfully in anyway. We are now preparing Court proceedings to seek the release of the stock and damages for conversion. HMRC, in my opinion, do not have reasonable grounds to suspect that the alcohol was or is liable to forfeiture. Certainly no grounds or suspicions were disclosed at the time of the detention”.

Peter adds "I also consider that such detentions may be a breach of Article 1 of the First Protocol, European Convention on Human Rights. Even if there were grounds to detain, the decision to seize or return the stock really must be made within 4 weeks in my view, not just as a matter of law but for the sake of legitimate businesses, the economy and jobs. HMRC's powers derive from  the Customs and Excise Management Act 1979. Although it is relatively recent, it is in my view outdated and needs to be amended. HMRC want to be satisfied that duty has been paid and quite rightly have concerns on "missing traders".  However, it is impossible for legitimate businesses to prove this, unless they have bought direct from the brewer/manufacturer.  Of course, we all want to work with HMRC to ensure that Duty and VAT is paid, as required.  That is not the issue. I know that those within the industry are calling for a system that protects both HMRC and also legitimate businesses.  I therefore want to hear from businesses that have faced or are facing such problems, including their experiences of responding to assessments raised and being unable to appeal these due to the lack of funding.  I will then consider whether there are good prospects in challenging HMRC's powers and the current legislation, and at the time finding a solution to the current system.  We already have interest from one MP in the North on this”.

Contact Peter on 01603 666001 or ph@rogers-norton.co.uk.