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Although we are all used to HMRC applying penalties on VAT errors, they have typically used their powers of applying civil penalties rather sparingly in the past where they have been duty underpayments, saving these for persistent offenders.

However, those days appear to be over and we are finding that they are stepping up their application of Civil Penalties when duty assessments are raised and they seem to relish the opportunity to raise penalties where errors are identified.

Action Point: Given that many businesses that import in particular are very passive with compliance measures, this approach by HMRC will undoubtedly cause additional financial burdens where they can be avoided.

Our advice is for businesses to ensure they familiarise themselves with all areas of Customs how it affects them, that they have systems and procedures in place for Customs matters and that these are regularly reviewed.

We can of course assist with all areas to ensure penalties don't arise and that all opportunities to minimise duty is taken.

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