Neil Griffin v The Commissioners for HMRC [2026] UKFTT 801 (TC)

[2026] UKFTT 00801 (TC)

Case No TC 09901

FIRST-TIER TRIBUNAL

TAX CHAMBER

Hearing Heard on: 14 May 2026

Date Judgment date: 29 May 2026

[By remote video hearing]

Appeal reference: TC/2024/04631

EXCISE DUTY – Civil evasion penalty – whether dishonest attempt to evade tax and duty – yes – appeal part allowed

Before

TRIBUNAL JUDGE ANNE SCOTT

Between

NEIL GRIFFINAppellant

THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondent

the Appellant in person for Appellant

Colin Williams, litigator of HM Revenue and Customs’ Solicitor’s Office for Respondents

DECISION

Introduction

[1]The appellant challenges the decision of the respondents (“HMRC”) dated 14 May 2024 to issue him with a joint Excise and Customs Civil Evasion Penalty in the total sum of £2,940 (“the Penalty”) being an Excise Penalty of £2,293 and a Customs Penalty of £647. The Penalty was issued in accordance with section 8(1) Finance Act 1994 (“FA 94”) and section 25(1) Finance Act 2003 (“FA 03”).

[2]The Penalty was imposed in relation to the importation of 6,000 cigarettes.

[3]With the consent of the parties, the hearing was conducted by MS Teams. Prior notice of the hearing had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to join the hearing remotely in order to observe the proceedings. As such, the hearing was held in public.

[4]The first hearing in this matter was on 17 October 2025 but the appellant did not appear. As there had been problems with the hearing link HMRC had very fairly asked that the hearing be adjourned in order to give the appellant a final chance to decide whether or not he wished to attend. Following correspondence, the appeal was listed for hearing on 27 January 2026 but unfortunately the appellant did not attend and a Decision was issued on 29 January 2026.

[5]Ultimately, following further correspondence from both parties, I issued Directions on 18 March 2026 setting aside the previous Decision and this hearing was thereafter listed.

[6]I heard evidence from Officers Dangerfield and Smith and from the appellant. All three were clear and credible witnesses. I had an updated hearing bundle extending to 314 pages.

Background facts

[7]On 25 June 2023, the appellant travelled from the Philippines via Kuwait to London Heathrow Airport.

[8]Officer Dangerfield intercepted the appellant in the green “nothing to declare” channel. She asked the appellant if he had any goods to declare to Customs and his response was that he had some tobacco. He conceded that it was in excess of the allowance. He had with him a duty free bag and two small holdalls. A search of the luggage disclosed the 6,000 cigarettes of mixed brands.

[9]Officer Dangerfield seized the cigarettes and issued a Seizure Information Notice (BOR156), a Warning Letter about Seized Goods (BOR162) and the appellant signed both of those. She also provided him with Customs Notices 1 (Customs Information) and 12A (Rights for Passenger upon goods seizure).

[10]The Warning Letter indicated that Border Force might share information with HMRC “who may take action against you such as issuing you with an assessment for any evaded tax or duty and a wrongdoing penalty …”.

[11]Border Force did then send details of the seizure to HMRC.

[12]On 15 March 2024, Officer Smith wrote to the appellant explaining that HMRC had received information from Border Force which gave them reason to believe that conduct involving dishonesty may have occurred. HMRC’s concern was in relation to the appellant’s involvement in the smuggling, or attempted smuggling, of tobacco products which did not have the appropriate duty paid on them.

[13]The appellant was invited to cooperate with HMRC and was advised that cooperation could significantly reduce any penalties that might become due. Amongst other things the appellant was asked, within 30 days, to:-(1) Return a signed and dated copy of the letter.

(2) Confirm who was involved in the smuggling attempt and state exactly what they did.

(3) Give a full explanation of what had happened.

(4) Confirm how many times and when he had smuggled goods and identify the quantity.

(5) Give details of all international travel between 25 June 2022 and 15 March 2024

(6) Provide any other information that might assist.

[14]On 3 April 2024, Officer Smith sent a reminder asking for a response by 17 April 2024.

[15]On 14 May 2024, having received no reply from the appellant, Officer Smith wrote to the appellant issuing the Penalty. The Penalty had not been reduced in any way since HMRC had decided that the appellant had not cooperated with HMRC.

[16]On 10 June 2024, the appellant emailed HMRC stating:- “I would like to request acceptance to review of my case. Can I please seek assistance (sic) in the steps in which I need to provide information as to the unfair nature of the assessment to which I have only just come to my attention in returning from abroad on June 8th. I am hopeful the case can be resolved without the need for appeal to an independant (sic) Tribunal”.

[17]On 1 July 2024, having had no response from HMRC, the appellant again emailed HMRC stating:- “I have not heard back from June 10th, requesting a review to my case. Could you confirm, that this review process is in the system.”

[18]On Thursday 9 July 2024, Excise Review Officer Hayley Baxter contacted the appellant on his mobile telephone number which had been furnished to HMRC in the original request for a review. The appellant explained to the officer that he had gone to the Philippines in April 2024 but he had not been living at the address to which the letter had been sent in March 2024 as there had been a fire.

[19]The appellant answered all of the questions posed by Officer Baxter which covered why and how he had brought the cigarettes into the country. The officer asked him to reply in writing answering the questions posed by Officer Smith. She told him that he could not reply by email.

[20]Later that day, Officer Baxter emailed the appellant referring to the telephone conversation and stating that “As agreed, you have until 16 July 2024 in which to provide your response to the enquiry points listed in Officer Smith’s initial letter dated 15 March 2024”. She asked that he respond to her direct and her address was on the email.

[21]Since the appellant has literacy issues, he asked his brother to help him and, within a couple of days, posted a reply to the questions posed in Officer Smith’s letter of 15 March 2024.

[22]On 12 July 2024, HMRC wrote a letter to the appellant stating:

“Thank you for your recent correspondence which was received in HMRC on 24 July 2024. HMRC have 45 days from that date to conduct a review of the decision and to notify the review conclusion. The review will be carried out by Hayley Baxter in this office and, when concluded, this officer will write to advise the review conclusion. If you have any additional evidence that you would like to provide, please do so within 10 days from the date of this letter. If you would like to speak to the review officer about this matter, they can be contacted directly on the number or email address above.”

[23]HMRC having not received the response, on 24 July 2024, Officer Baxter upheld Officer Smith’s decision to issue the Penalty.

[24]In that letter under a heading “What happens next” she explained that the review was concluded and if he had any questions he could contact Officer Smith by telephone but that if he still disagreed with the decision he had 30 days within which to appeal to the Tribunal.

[25]On 23 August 2024, with the help of a friend, the appellant lodged his Notice of Appeal with the Tribunal. He argued that:(a) He had been unfairly treated by HMRC. The penalty would cause him hardship.

(b) He had not received the letter of 15 March 2024 because he was caring for his father elsewhere. The other correspondence had been issued whilst he was out of the country.

(c) On his return to the UK he had read the Penalty Notice and enquiry letter and had contacted HMRC. He had spoken by phone with Officer Baxter who had asked him “many questions”. He had wanted to give all, and any, information to HMRC by telephone but had been told that he would have to write to HMRC and could not use email.

(d) He had limited education and required assistance in submitting the appeal to the Tribunal.

(e) His home had been completely destroyed by fire in 2023 and he had lived with friends and family until June 2024. It had been a traumatic year and the stress had been intolerable.

(f) His home had not been insured and he had been short of money and therefore had bought the cigarettes abroad. He knew that duty free was limited so he had bought the cigarettes abroad assuming that duty would be paid in that country. He said that he had explained that to Officer Baxter.

(g) He would “resend the letter if needed” or answer any questions by phone.

[26]On 12 March 2026, in response to Directions that I had issued on 26 February 2026, treating the appellant’s correspondence in 2026 as a request for set aside, the appellant sent an email with enclosures to HMRC, and copied to the Tribunal, and stated that the points that he would have made in the previous hearing, had he been able to attend, were:(a) He thought that he had explained everything to Officer Baxter.

(b) He would try and fill in a digital questionnaire, if that was possible.

(d) He had thought that because tax was paid in the Philippines, the cigarettes should not have counted as a problem.

(e) He had only started smoking again during Covid and it was the first time that he had brought cigarettes into the UK and he had not understood the detail of the rules.

(f) He had explained all of that to Officer Baxter and the telephone call had lasted some 20 minutes; he had tried very hard to cooperate.

The law

[27]Sections 78 and 139 of the Customs and Excise Management Act 1978 provide that a person entering the UK may be required to answer questions about their baggage and produce items for examination. In circumstances where items chargeable with duty or tax are found concealed, they are liable to forfeiture, and as such may be seized or detained.

[28]Sections 8(1) and (4) of the FA 94 provide as follows:

“8 Penalty for evasion of excise duty (1) Subject to the following provisions of this section, in any case where - (a) any person engages in conduct for the purpose of evading any duty of excise, and (b) his conduct involves dishonesty (whether or not such as to give rise to any criminal liability), that person shall be liable to a penalty of an amount equal to the amount of duty evaded or, as the case may be, sought to be evaded. … (4) Where a person is liable to a penalty under this section – (a) the Commissioners or, on appeal, an appeal tribunal may reduce the penalty to such amount (including nil) as they think proper; and (b) an appeal tribunal, on an appeal relating to a penalty reduced by the Commissioners under this subsection, may cancel the whole or any part of the reduction made by the Commissioners.”

[29]Section 8 of FA 94 was repealed by paragraph 21(d)(i) of Schedule 40 of the Finance Act 2008 with the exception of the dishonesty penalty, which was preserved by the Schedule 41 (Appointed Day and Transitional Provisions) Order 2009.

[30]Sections 25(1) and 29(1)(a) of FA 03 provide as follows:

“25 Penalty for evasion (1) In any case where – (a) a person engages in any conduct for the purposes of evading any relevant tax or duty, and (b) his conduct involves dishonesty (whether or not such as to give rise to any criminal liability), that person is liable to a penalty of an amount equal to the amount of the tax or duty evaded or, as the case may be, sought to be evaded. … 29 Reduction of penalty under sections 25 or 26 (1) Where a person is liable to a penalty under sections 25 or 26 – (a) the Commissioners (whether originally or on review) or, on appeal, an appeal tribunal may reduce the penalty to such amount (including nil) as they think proper; and (b) the Commissioners on a review, or an appeal tribunal on an appeal, relating to a penalty reduced by the Commissioners under this subsection may cancel the whole or any part of the reduction previously made by the Commissioners. (2) In exercising their powers under subsection (1), neither the Commissioners nor an appeal tribunal are entitled to take into account any of the matters specified in subsection (3). (3) Those matters are – (a) the insufficiency of the funds available to any person for paying any relevant tax or duty or the amount of the penalty, (b) the fact that there has, in the case in question or in that case taken with any other cases, been no or no significant loss of any relevant tax or duty, (c) the fact that the person liable to the penalty, or a person acting on his behalf, has acted in good faith.”

[31]Section 31(2) FA 03 provides that a demand notice under section 25 may not be given more than two years after HMRC have identified the evasion of duty.

[32]The Travellers’ Allowance Order 1994, as amended, provides for the limits for the importation of relevant goods from third countries (whereby a “third country” is defined in relation to relief from excise duties as a place to which Council Directive 92/12/EEC of 25 February 1992 does not apply). The limit for cigarettes is 200.

[33]The test for dishonesty has been clarified by the Supreme Court in Ivey v Genting Casinos (UK) Ltd t/a Crockfords

[2017] UKSC 67

(“Ivey), unifying the principles for civil and criminal cases. Lord Hughes (with whom Lord Neuberger, Lady Hale, Lord Kerr and Lord Thomas agreed) stated as follows at [74]:

“[74] These several considerations provide convincing grounds for holding that the second leg of the test propounded in Ghosh does not correctly represent the law and that directions based upon it ought no longer to be given. The test of dishonesty is as set out by Lord Nicholls in Royal Brunei Airlines Sdn Bhd v Tan and by Lord Hoffmann in Barlow Clowes: see para 62 above. When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest.” (Emphasis added)

Discussion

[34]The burden on proof lies on HMRC to show on the balance of probabilities that the conduct of the appellant involved dishonesty.

[35]Officer Dangerfield confirmed that when he was stopped in the green channel and asked if he had anything to declare, the appellant had immediately confirmed that he did have cigarettes to declare. In her words, he had been “compliant”. As can be seen from his Notice of Appeal the appellant was aware of the duty-free limits. In the words of Lord Hughes, “ordinary decent people” would have known that the duty-free limits exist for a reason. I have added emphasis to the quotation because the fact that the appellant thought that some lower amount of tax had been paid in the Philippines does not assist him.

[36]I find that HMRC have established that the appellant imported the cigarettes dishonestly.

[37]Section 8(5) FA 94 means that neither HMRC nor the Tribunal can take into account the fact that the appellant cannot afford the penalty.

[38]It is trite law that the Tribunal has no jurisdiction to consider whether the law is fair or not.

[39]The issue then for the Tribunal is whether or not there should be any reduction of the penalty. I observe that Officer Baxter confirmed that the calculation of the excise duty that had been evaded had been on the basis of using the lowest UK recommended retail price at the time of the seizure and applying it to all of the cigarettes (which were mixed brands). That was in the appellant’s favour. Furthermore, that produced a total for excise duty of £2,293 which was lower than the minimum excise duty (for that number of cigarettes) of £2,360. That is also in the appellant’s favour. The quality of the cigarettes does not assist the appellant.

[40]Under section 29(1) of the FA 03 (in respect of customs duty) and section 8(4) of FA 94 (in respect of excise duty) HMRC and on appeal, the Tribunal “may reduce any penalty to such amount (including nil) as they think proper”. HMRC accept that there is no statutory guidance on what principles should be applied in determining any reduction.

[41]HMRC’s policy on mitigation is set out in HMRC Notice 300 which provides that HMRC will reduce such penalties by up to 80 percent as follows:(1) Up to 40 percent for disclosure - an early and truthful explanation as to why the arrears of tax arose and the true extent of them including what has happened and over what period of time along with any information about the value involved rather than the precise quantification.

(2) Up to 40 percent for cooperation - fully embracing and meeting responsibilities under the penalty procedure by, for example, supplying information promptly, answering all questions truthfully, giving the relevant information to establish the true liability and cooperating to the end of the investigation.

[42]In this case, HMRC have not awarded any reduction because the appellant had failed to supply a written response either to the initial enquiry letter of 15 March 2024 or to the review request on 9 July 2024.

[43]The appellant argues that he did cooperate in so far as he did give Officer Baxter information by telephone and he has explained that he had not received Officer Smith’s letters until 8 June 2024. He acted very promptly thereafter.

[44]I take the view that HMRC’s approach to mitigation in this case is somewhat harsh given that:(a) On being stopped in the green channel the appellant immediately confirmed that he did indeed have goods to declare.

(b) On his return to the UK on 8 June 2024 the appellant took prompt action and emailed HMRC on 10 June 2024 and he asked for assistance. Despite a reminder from him, none was furnished.

(d) When Officer Baxter telephoned him, he attempted to provide information by telephone and offered to do so by email but was apparently told that email was “unsafe”.

[45]I accept that Officer Baxter never received a written reply to the questions which had been posed, but I also accept that the appellant did post a letter to HMRC. The timescale of seven days after the telephone call was very short. Whilst Officer Baxter did ask him to write to her, his evidence was that because the “form” came from Officer Smith he had sent it to the address on the form. That is simply the postcode address of BX9 1LE for HMRC’s “Indv and Small Business Compliance” Unit.

[46]The review conclusion letter makes it clear that no letter had been received within the agreed timescale of 16 July 2024 and nor had a letter been received by 22 July 2024. In those circumstances, I am unsurprised.

[47]Mr Wilson argued that when the review conclusion letter was received the appellant should have contacted Officer Baxter to say that he had sent the letter and he could then have provided the evidence sought thus obviating the need for a Tribunal hearing.

[48]I do not accept that argument. Firstly, as I have demonstrated at paragraphs 20 and 22 above, HMRC’s correspondence with the appellant on the issue of the review decision would have been confusing to a taxpayer with greater literacy skills than the appellant. Secondly, I accept the appellant’s argument that when he received the review conclusion letter, he felt that he had no option but to appeal to the Tribunal and that is what he did. He made it very clear in his Notice of Appeal that he had sent the letter and that he would be happy to answer the questions again.

[49]Overall, I find that there should be some mitigation for both disclosure and co-operation and that the proper level of penalty in the present case is 60% of the tax and duty dishonestly evaded giving a total penalty due of £1,764 ie a reduction of 40%.

Decision

[50]For the reasons given above the Tribunal allows the appeal in part.

[51]The Penalty is upheld in the sum of £1,764.

Right to apply for permission to appeal

[52]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. Release date: 29 May 2026