Who is likely to be affected

This measure will affect companies and individuals responsible for excise products subject to the special customs free zone procedure and the authorized use procedure.

General description of the measure

This measure will extend the scope of the penalty regime for wrongdoing in excise matters in annex 41 of the 2008 finance law, so that it will apply in the event of a violation of the legislation on excise. excise duty created under Article 45 of the Tax Law (Cross-border Trade) of 2018. This will have the effect of covering offenses relating to excisable products in the new special customs procedure of the free zone, which are provided for in the secondary legislation taken under Article 45 of the Tax Law (Cross-border Trade) 2018. A minor amendment is also required to recognize the authorized use procedure which replaced the end use procedure when the regime penalty penalties already applied.

Policy objective

This measure aims to protect the excise regime against tariff irregularities by applying the excise penalty regime in:

  • free trade zones
  • the authorized use procedure

This measure aims to deter and combat serious breaches.

It also ensures the application of a consistent approach between suspensive regimes when it comes to dealing with irregularities and wrongdoing concerning excise goods. This will protect income and provide a level playing field between businesses that sell excise goods.

Context of the measure

The government issued a consultation response on the new free zone procedure in October 2020. In it, the government confirmed that all excise duties will be suspended when goods enter a free zone procedure; companies will therefore follow similar rules for products subject to excise under the free zone procedure as those which apply to products subject to excise suspension in the rest of the UK. While excisable products may initially enter free zones under existing procedures, provisions allowing excisable products to be suspended in free zones under the free zone procedure are underway. development in a timely manner.

This measure was announced in the fall 2021 budget.

Detailed proposal

Effective date

The measure will come into force shortly after the measure was announced in the fall 2021 budget.

Current law

The sanctions regime in the event of excise abuse is defined in appendix 41 of the 2008 finance law.

Proposed revisions

Legislation will be introduced in the 2021-22 finance bill amending annex 41 of the 2008 finance law relating to the sanctioning regime for excise offenses:

  • The legislation will amend paragraph 1 of Annex 41 to insert a reference to the procedure for authorized use.
  • The legislation will also amend paragraph 4 of Annex 41 to insert a reference to excise duty points created or deemed to be created under section 45 of the Taxation (Cross-Border Trade) Act 2018.

Summary of impacts

Cash Impact (£ m)

2021 to 2022 2022 to 2023 2023 to 2024 2024 to 2025 2025 to 2026 2026 to 2027
nothing nothing nothing nothing nothing nothing

This measure should not have an impact on the chessboard.

Economic impact

This measure is not expected to have significant economic impacts.

Terms used in this section are defined in accordance with the Office for Budget Responsibility Indirect Effects process. This will apply when, for example, a measure affects inflation or growth. You can request more details about this measure at the email address provided below.

Impact on individuals, households and families

This measure should not have any impact on individuals as there should be no change to what they are currently doing.

There should be no impact on the formation, stability or breakdown of the family.

Impacts on equality

This measure should not have any impact on equality.

Impact on businesses, including civil society organizations

This measure should not have any impact on businesses or civil society organizations, as there should be no change from what they are currently doing.

Operational impact (£ M) (HMRC or other)

HMRC should not see any operational costs in introducing this measure.

Gov.uk guidelines will be updated to illustrate the application of this measure.

Other impacts

Other impacts have been taken into account and none have been identified.

Monitoring and evaluation

The measure will be monitored using information gathered from tax receipts.

Additional tips

If you have any questions about this change, please contact Barry Jordan by phone: 03000 522 306 or email: [email protected]