How to deal with the seizure of goods
Handling seizures by HMRC or the UK Border Force
What should you do if you or a client has good seized by HMRC or the UK Border Force? Adam Craggs and Michelle Sloane explains all
UK Border Force (UKBF) and HMRC have extensive powers to seize goods that are being imported into the UK. It is important that if your goods get seized you are aware of your rights of challenge. Strict time limits apply and if you do not act within these time limits, you will not be able to challenge the legality of the seizure.
Why are goods seized?
There are many reasons why UKBF or HMRC might decide to seize items. The main reasons are as follows:
- unpaid or underpaid customs duty.
- unpaid excise duty.
- goods contaminated with illegal substances (drugs, for example).
- imports in breach of regulatory requirements.
- illegal items (for example endangered species).
Powers of seizure
The main power of seizure is contained in section 139 of the Customs and Excise Management Act 1970 (CEMA). Section 139(1) provides: “anything liable to forfeiture under the customs and excise Acts may be seized or detained by any officer or constable …”.
Upon the seizure of goods by UKBF or HMRC, one of two documents will be issued: (i) a Seizure Information Notice if you are present at the seizure, or (ii) a Notice of Seizure if you are not present at the time of seizure. Both of these documents will list the goods that have been seized. These notices are also referred to as Notice 12A.
Challenges to seizures
If it is not accepted that either UKBF or HMRC should have seized the goods, there are two options available. These options can be pursued simultaneously.
1. Option one – challenging the legality of the seizure: This option, also known as ‘condemnation proceedings’, should be used where it is not accepted that UKBF or HMRC had a lawful basis to seize the goods. Condemnation proceedings are heard in the Magistrates Court.
In order to begin condemnation proceedings, a Notice of Claim must be received by either UKBF or HMRC within one calendar month of the date of the seizure shown on the Notice 12A. If you fail to challenge within this time period, ownership of the seized goods is transferred to the agency that seized it. There is no provision in law for late challenges.
The Notice of Claim should set out clear and concise reasons as to why the seizure of goods was unlawful. UKBF or HMRC will then apply to the Magistrates Court for condemnation proceedings. Most cases are heard within six months and the hearing will usually last less than a day.
If you are successful in your challenge, the goods will be returned to you unless UKBF or HMRC has already sold the goods in which case you will receive monetary compensation.
If you are not successful in your challenge, the goods will be ordered as seized and you may be liable for costs. If you disagree with the Magistrate’s decision you can appeal to the Crown Court.
2. Option two – request that the goods are returned: This option, known as ‘restoration’, is where you accept the legality of the seizure, but you do not consider the seizure is justified in the circumstances.
The general policy of UKBF and HMRC is not to return seized goods, however, a mechanism exists under section 152(b) of CEMA for UKBF or HMRC to “restore, subject to conditions … anything forfeited or seized”. This is a power that UKBF and HMRC can use at their discretion.
In order to claim restoration, a letter must be sent to the seizing agency with an explanation as to why the goods should be returned. Proof of ownership must be provided along with the reasons for restoration which must be exceptional, such as:
- the goods are of important cultural heritage.
- the goods are highly valuable and/or unique.
- a genuine mistake was made out of your control.
There is no time limit in law to request restoration; however, it is advisable to act without delay and within one month, as the goods may be sold.
If UKBF or HMRC accept the request for restoration it can impose certain conditions such as payment of a fee, and once any such condition has been complied with, the goods will be returned to you.
If UKBF or HMRC refuse your request or you disagree with the conditions imposed, a review can be requested by an impartial officer. This request for review must be received by UKBF or HMRC within 45 days of the previous decision and again you must set out the reasons for restoration. The review officer will then have 45 days to carry out a review and report his or her decision.
If you do not agree with the decision of the reviewing officer, an appeal can be made to the First-tier Tax Tribunal within 30 days of the review conclusion letter.
• Review the Notice of Seizure and consider the legality of the seizure.
• Prompt action is important where goods have been seized.
• To minimise the risks of seizure taking place, always check customs requirements before each import as they can change regularly.
• Ensure sufficient security is in place over items being imported to avoid smugglers placing contraband items with your goods.
• Always keep proof of ownership of goods as this information is required when challenging a seizure.
• Adam Craggs is a partner and head of the tax disputes resolution team at RPC. He can be contacted on 020 3060 6421 or by email: email@example.com.
• Michelle Sloane is a senior associate in the team. She can be contacted on 020 3060 6555 or by email: firstname.lastname@example.org.