Judgment summary
This appeal concerned an Excise & Customs Civil Evasion Penalty of £22,297.00 issued to Andrew Burridge on 11 April 2025 and upheld on review on 21 May 2025 (1). HMRC's case was that the Appellant's conduct on 15 April 2024, when he entered the United Kingdom carrying 35.35kg of hand rolling tobacco, involved dishonesty giving rise to liability for the penalty (2).
The Tribunal, applying the test from Ivey v Genting Casinos (UK) Ltd [2017] UKSC 67, concluded that HMRC had discharged the burden of proving dishonesty on the balance of probabilities (36, 37, 41). The appeal was allowed only to the extent of a 15% reduction for cooperation and a further 15% reduction for disclosure of the penalty assessed (46, 48).
Background
On 15 April 2024 the Appellant arrived at Manchester Airport from Banjul, Gambia, carrying 35.35kg of hand rolling tobacco, which was not UK duty paid and exceeded the travellers' allowance of 250g under the Travellers Allowance Order 1994 (4, 9). Border Force seized the goods and the seizure was not challenged, so the goods were treated as condemned and forfeit (5).
HMRC issued the penalty decision on 11 April 2025 and upheld it following a statutory review on 21 May 2025 (6, 7). The Appellant appealed to the Tribunal on 9 June 2025 (7).
Border Force officer Mr Haigh's evidence, which was accepted by the Appellant and the Tribunal, recorded that when asked about his tobacco allowance, the Appellant replied "We're not in the EU anymore", and when told of the 250g allowance he replied "Oh well you're going to take them off me then" (21). HMRC officer Mr Doherty was responsible for issuing the penalty and gave evidence about the enquiry letters sent on 6 March 2025 and 21 March 2025, to which no timely response was received (22, 23, 26).
Core dispute
The issues before the Tribunal were whether the Appellant engaged in conduct for the purpose of evading duty, whether such conduct involved dishonesty, whether HMRC had discharged the burden of proof, and alternatively whether the penalty should be reduced (20).
The Appellant's grounds of appeal included that his conduct was reckless and ignorant rather than dishonest, that he was unaware of the customs allowance, that he had literacy and processing difficulties due to dyslexia, that this was his first such offence, and that the penalty would have a huge detrimental effect on him and his family (19).
Court findings
The Tribunal accepted Mr Haigh's evidence in full, noting the Appellant entered the Green Channel indicating no excess goods to declare (38). The Tribunal rejected the Appellant's claim that he was wholly unaware of tobacco limits, finding that a traveller with his experience of international flights would more likely than not have known that allowances applied, and that his reference to the EU indicated awareness of import restrictions (39).
The Tribunal found the Appellant's own evidence, that he had queried whether there was a purchase restriction, reinforced the conclusion that he recognised the substantial quantity he was buying, being 141.4 times the duty-free allowance (40, 24(b)). The Tribunal concluded that, subjectively, the Appellant knew he was carrying tobacco in excess of his allowance and did not intend to declare it, and that this conduct was dishonest by the standards of ordinary decent people (41).
On mitigation, the Tribunal found that HMRC's approach failed to take account of the Appellant's literacy challenges, though this was not a criticism of HMRC as the factor was unknown to them (44). The Tribunal noted the Appellant had cooperated with Border Force at interception and had responded, albeit late, to HMRC's reminder letter (45). The Tribunal held that financial hardship and inability to pay could not be taken into account, as precluded by section 8(5) Finance Act 1994 and section 29(2) and (3)(a) of Finance Act 2003 (47).
Outcome
The Tribunal allowed the appeal in part, granting a 15% reduction for cooperation and a 15% reduction for disclosure in respect of the penalty assessed (46, 48, 49). HMRC was directed to recalculate the total revised level of the penalty and write to the Appellant accordingly (48).
Major issues / areas of contention
- Whether the Appellant engaged in conduct for the purpose of evading duty
- Whether such conduct involved dishonesty under the Ivey v Genting Casinos test
- Whether HMRC discharged the burden of proving dishonesty
- Whether the penalty should be reduced for mitigation, including cooperation and disclosure
- Whether the Appellant's literacy and processing difficulties affected the mitigation assessment
- Whether financial hardship could be taken into account in reducing the penalty