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Powers to tackle excise fraud are strengthened

New legislation to strengthen excise powers to investigate and tackle fraud took effect from 1 April 2011. The aim is to protect legitimate businesses and the revenue.

Safeguards have been built in so that, for instance, HM Revenue & Customs (HMRC) existing policy that it will not inspect premises used only as private dwellings is now stated in law.

The changes were made by amending the Customs and Excise Management Act 1979. The record keeping and time limits have also been aligned so they are the same as other UK tax regimes.

The legislation applies to Air Passenger Duty, Alcohol Duty, Amusement Machine Licence Duty, Bingo Duty, Gaming Duty, General Betting Duty, Holding and Movements, Hydrocarbon Oils Duty, Lottery Duty, Pool Betting Duty, Remote Gaming Duty and Tobacco Duty.

HMRC consulted widely on the legislation and it is broadly supported by the industry.

Please read factsheet Excise visits (PDF 43K), which explains the excise inspection and information powers in plain English.

Inspections

The legislation extends the powers of entry in sections 112 and 118 CEMA 1979 so officers can inspect documents, as well as goods.. HMRC can take copies and remove originals. It also makes clear that the powers apply to premises used but not owned by revenue traders.

The section 161A search warrant is amended so that officers can search for documents relevant to excise goods.

Information notice

There is a new tribunal approved Excise Information Notice. HMRC use this to obtain information about excise traders and goods from third parties, for example banks, landlords or haulage firms. If they don’t comply they can be penalised.

Time limits

The time limits for assessments and claims for excise increase from three years to four. There is a transitional period from 1 April 2011 to 31 March 2012 before the new time limits become fully operational from 1 April 2012. The 20 year time limit for assessments is amended so that it applies where money is due because the person has deliberately not paid it. See the Revenue & Customs Brief

Record keeping

There are minor changes to record keeping requirements to align them with other taxes.

More information

Questions and answers briefing on these changes

See the Powers Review information on these changes

How HMRC check other taxes you may pay

Compliance Handbook for guidance on time limits and record keeping