Adrian Filimon v The Commissioners for HMRC [2026] UKFTT 842 (TC)

[2026] UKFTT 00842 (TC)Case No TC 09909
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 2 June 2026Date Judgment date: 04 June 2026
Taylor House London
Appeal reference: TC/2024/03851
Penalties – Customs civil evasion penalty - Excise civil evasion penalty – Whether sufficient evidence to establish dishonest conduct by Appellant – No - Appeal allowed
Before
TRIBUNAL JUDGE BROOKSTRIBUNAL MEMBER BELL
Between
ADRIAN FILIMONAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentMatei Clej of counsel for AppellantDenis Edwards of counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs for RespondentsDECISION

Introduction

[1]The Appellant, Mr Adrian Filimon, appeals against a Customs Civil Evasion Penalty in the sum of £17,868 issued by the Respondents (“HMRC”) on 8 February 2024 under s 25(1) Finance Act 2003 and an Excise Civil Evasion Penalty in the sum of £41,957 issued by HMRC also on 8 February 2024 under ss 8 and 13 Finance Act 1994.[2]For the reasons below we have concluded that HMRC have not established dishonesty on the part of Mr Filimon and, as a result, have allowed his appeal and set aside the penalties.

Facts

[3]In addition to a hearing bundle comprising 179 pages we heard from Border Force (BF) Officer Robin Harper, HMRC Officer Lee Crozier and Mr Filimon (through an interpreter). We found all three witnesses to be straightforward and credible. It is on the basis of this evidence that we make the following findings of fact.[4]At 02:20 on 2 July 2023, BF Officer Robin Harper stopped a Romanian registered Volvo heavy goods vehicle (the “Vehicle”) towing a Romanian registered curtain sided trailer (the “Trailer”) at Dover Eastern Docks. Officer Harper’s notebook records the following exchange that took place between him (RH) and Mr Filimon (AF), the driver of the Vehicle: RH: Hello Chef do you speak English? AF: Yes a little. RH: CMR and passport please? The driver then handed me a CMR and Romanian passport in the Name of Adrian Filimon, Date of Birth 31 March 1997, Passport number XXXXXX. RH: What is your load? AF: Packaging. RH: Did you see loading? AF: Yes. RH: Is this you company? (pointing to CMR). AF: Yes SC Camsion SRL RH: Is it a big or small company? AF: Small. RH: How many Cabs/Trucks does your company have? AF: 7 Trucks. RH: How long have you driven for the company? AF: 3 years. RH: Do you have any Cigarettes or Tobacco? AF: 2 and a half cartons. RH: Complete? AF: Yes. RH: Any alcohol beer, wine, spirits? AF: No, no alcohol. RH: Any cash? AF: Minimal. RH: And you know in the UK no drugs, guns, bombs, hashish, cocaine, knives, weapons its all illegal? AF: Yes I know. RH: And do you always travel Romania to UK? AF: Yes. RH: Chef do you have plombe? AF: Yes. RH: OK chef we will have a look.[5]The CMR given to Officer Harper stated that the goods, 188 pallets of ‘packaging’ and 896 cartons of ‘packaging’, from Joyson Safety Systems Sibiu, a Romanian business, was to be transported by SC Camsion SRL to Invista Textiles UK in Gloucester. Although Mr Filimon told the officer that he had seen the lorry being loaded with the packaging, at the hearing he explained that he had collected the lorry and trailer fully loaded and sealed from premises belonging to SC Camsion SRL. Also, having told Officer Harper when he was stopped that the company was his, it was clear from his response when asked the same question at the hearing, that he meant that it was his employer’s company.[6]Following a scan, which had identified an anomaly in the load, the Trailer was searched. It was found to contain 102,200 mixed brand cigarettes which had been concealed in “cut outs” in brown cardboard squares approximately 5cm thick that were stacked on top of each other.[7]Officer Harper’s notebook records that, when he told Mr Filimon that 102,200 cigarettes had been concealed in the load, Mr Filimon had “accepted ownership”. However, in evidence, when asked why this had not been recorded as an almost verbatim exchange in his notebook, as he had in relation to that recorded when the vehicle was initially stopped, Officer Harper explained that Mr Filimon had not said anything when told about the concealed cigarettes but had “just nodded his head”.[8]Mr Filimon accepted that he had nodded his head but said that this was in recognition of the fact that a quantity of cigarettes had been discovered by the search and not an acknowledgement of ownership of those cigarettes. He said that the discovery of such a large quantity of cigarettes had come as a “complete shock” to him as he did not know they were there.[9]The cigarettes, Vehicle and Trailer were seized by BF and, at 06:30 on 2 July 2023, Mr Filimon was escorted by Officer Harper from BF controls with his belongings. Later that morning Mr Filimon contacted his employer to explain what had happened. He was told “not to worry” and that they would “solve everything”. This, he said, made him suspicious of his employer’s possible involvement in having concealed the cigarettes. He said his suspicion of his employer’s involvement was further increased when he discovered that other drivers with the company had experienced similar incidents. As a result he began searching for other employment and, after five to six months, left the company to take up employment as a driver for a German company.[10]On 21 December 2023 Lee Crozier, an officer of HMRC, wrote to Mr Filimon stating:
“HMRC has received information from Border Force that gives us reason to believe that conduct involving dishonesty may have occurred in relation to your EU/UK Customs obligations. We are now checking your Customs Duty, Import VAT, and Excise Duty affairs regarding this. You may wish to show this letter to your adviser if you have one. The matters that are the subject of this compliance check are your involvement in the smuggling, or attempted smuggling, of alcohol or tobacco products into the UK that have not had the appropriate duty paid on them. For clarity of what HMRC means by smuggling: Smuggling is the criminal offence of bringing into a country, those items that are prohibited or upon which customs or excise duties have not been paid, should they exceed any permitted allowances. If there is anything about your health or personal circumstances that may make it difficult for you to deal with this check, please tell us so that we may help you in the most appropriate way. … No decision has yet been made as to whether there has been dishonest conduct. We will keep an open mind that there may be an innocent explanation for the suspected irregularities.”
[11]The letter explained that co-operation with HMRC’s enquiry could significantly reduce any penalties. It also contained a list of information sought from Mr Filimon who was required to respond to the letter within 30 days. As there was no response to this letter, Officer Crozier wrote again to Mr Filimon on 11 January 2024.[12]In the absence of a reply, a further letter was sent by Officer Crozier on 8 February 2024 which stated:
“Dear Mr Filimon, Civil Evasion Penalty Notice of Assessment As you know, during our checks into your tax affairs we have found that you had not declared the right amount of duty. This was because on 2 July 2023 you entered Dover Eastern Docks falsely indicating you had nothing to declare when in fact, you were carrying excise goods in excess of your allowances. We consider your actions were dishonest and, because of this, we are now going to charge you a civil evasion penalty. We are charging this penalty under Section 25(1) of Finance Act 2003 for the evasion and/or attempted evasion of Customs Duty and/or Import VAT, and under Section 8(1) of Finance Act 1994 for the evasion and/or attempted evasion of Excise Duty.”

Civil Evasion Penalty Notice of Assessment

[13]The letter continued by explaining how the Customs Civil Evasion penalty of £17,868 and Excise Civil Evasion Penalty of £41,957 had been calculated.[14]In evidence, Officer Crozier confirmed that his finding of Mr Filimon’s dishonesty relied upon the fact that, as Officer Harper had recorded in his notebook, Mr Filimon had accepted ownership of the cigarettes when he was told that they had been discovered.[15]On 18 March 2024 Mr Filimon’s then representative, a Romanian attorney, requested a review of the decision to issue the penalties. Although out of time, the request for a review was accepted and a review undertaken by HMRC.[16]However, the penalties were upheld following that review by a HMRC officer not previously involved with the case, Officer Hayley Baxter. She wrote, in the review conclusion letter dated 20 May 2024, that when Mr Filimon was asked (by Officer Harper):
“… if you had any cigarettes or tobacco, you replied “2½ cartons”
. You also confirmed that was all you had. A search of the vehicle found 102,200 mixed brand cigarettes concealed throughout the load. When you were informed of this, it is recorded in the notebook that you took ownership of the goods. I am therefore satisfied that you made a false decision [sic] as to the number of goods in your possession. … The evidence provided by BF shows that a considerable amount of effort had been made to conceal the goods in an attempt to avoid detection; this is indicative of dishonest behaviour. This also leads me to believe that you were fully aware that what you were doing was wrong. I am satisfied that by dishonestly attempting to import a number of cigarettes exceeding your duty free allowance, you are legally liable to a civil penalty.”[17]On 19 June 2024 Mr Filimon appealed to the Tribunal on the grounds that he had not been dishonest and had co-operated with HMRC. He explained that, although not addressed in the letter to HMRC from his Romanian attorney, he had not responded to HMRC’s letters of 21 December 2023 and 11 January 2024 as he had not received them. This he said was because they had been sent to the wrong address. Mr Filimon said that although he did receive HMRC’s letter of 8 February 2024, which was sent to the same address, this was not until 8 March 2024. Mr Filimon said that as soon as he was aware of the situation, he had instructed a Romanian attorney who he understood to act in international matters to act for him and respond to HMRC.

Discussion and Conclusion

[18]The penalties in this case have been issued by HMRC under ss 8 and 13 Finance Act 1994 and s 25 Finance Act 2003 (the material parts of which we have set out in an Appendix to this decision). In essence these provide that a person who is engaged in dishonest conduct for the purpose of evading duty shall be liable to a penalty equal to the amount of duty evaded or sought to be evaded.[19]It is not disputed that it is for HMRC to establish that a person, in this case Mr Filimon, engaged in dishonest conduct for the purpose of evading excise duty (see s 16(6) Finance Act 1994) and evading customs duty (see s 33(7)(a) Finance Act 2003) and that the following test is to be applied (taken from the decision of the Supreme Court in Ivey v Genting Casinos (UK) Limited t/a Crockfords [2017] UKSC 67 at [74]) that:
“… 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.”
[20]The standard of proof is the civil standard of the balance of probabilities (see eg Bintu Binette Krubally N’diaye v HMRC [2015] UKFTT 380 at [83]).[21]It is therefore necessary to consider whether HMRC have established whether it was more likely than not that Mr Filimon dishonestly engaged in any conduct for the purpose of evading any duty.[22]The dishonest conduct relied upon in this case, as confirmed by Officer Crozier (see paragraph 14, above) and the review conclusion letter (see paragraph 16, above), was Mr Filimon’s acceptance of ownership (and therefore knowledge) of the 102,200 concealed cigarettes even though he had told Officer Harper that he only had 2½ cartons of cigarettes.[23]However, unlike the initial questions asked by Officer Harper, which are set out in an almost verbatim question and answer format, there is nothing in his notebook other than a statement that when informed that a quantity of cigarettes had been found in the load “he accepted ownership”.[24]It was not until the hearing that Officer Harper confirmed that Mr Filimon had not said anything at all but had nodded his head when told about the concealed cigarettes. Something Mr Filimon said that he did in acknowledgment of being told that the cigarettes had been found and nothing more.[25]Mr Filimon’s nodding of his head, especially given his limited knowledge of English, cannot, in our judgment, be regarded as being synonymous with a spoken confirmation of ownership of the concealed cigarettes and does not amount to sufficient evidence for us to be able to conclude that HMRC have established, on a balance of probabilities, that Mr Filimon engaged in dishonest conduct for the purpose of evading any duty.[26]His appeal therefore succeeds and the penalties are set aside.[27]However, if we had found that HMRC had adduced sufficient evidence to establish dishonesty we would have upheld the penalties in full for lack of co-operation by Mr Filimon. That is because of his failure to respond to correspondence from HMRC prior to the issue of the penalties.[28]Although the letters from HMRC were sent to a different address from that stated as his, in his Romanian attorney’s letter, Mr Filimon, at paragraph 37 of his witness statement, referred to HMRC’s initial letter of 21 December 2023 not reaching him promptly, not receiving the reminder letter of 11 January 2024 and receiving the 8 February 2024 penalty notice from HMRC in March 2024.[29]All three letters had been sent to the same address and two of those had been received by Mr Filimon. However, it was only on receiving the penalty notice that Mr Filimon instructed the Romanian attorney to write to HMRC. We note that there was nothing in that correspondence that referred to previous letters not having been received or had been sent to the wrong address, neither was the information sought by HMRC in the letter dated 21 December 2023 provided by or on behalf of Mr Filimon, that is despite that letter having been received by him, albeit late.

Right to apply for permission to appeal

[30]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: 04 June 2026