Amendment to the Customs and Excise Management Act

The measure

The government will legislate in Finance Act 2021 to introduce a civil penalty for the unauthorised removal of goods that have been seized from a trader’s premises, or ‘in situ’. The penalty will apply to traders removing seized goods without prior authorisation from HMRC.  


Who will be affected?

Businesses importing goods into the UK who divert them onto the UK market without payment of the correct amount of import duty and import VAT. 


When will the measure come into effect?

The change will have effect from Royal Assent to Finance Bill 2021. 

Our view

This measure is a legislative amendment to Schedule 3 of the Customs and Excise Management Act (CEMA) 1979 to allow HMRC to levy a civil penalty for goods seized ‘in situ’ (i.e. seized goods that remain in the place where they have been seized, instead of being moved into a Border Force controlled warehouse) that are removed without prior authorisation.

Currently, Schedule 3, CEMA 1979 allows for goods to be seized and kept on a trader’s premises, but it does not refer to seizure ‘in situ’ and therefore if seized goods are removed without prior authorisation, no penalty can be issued. This measure has been announced to protect the import duty and VAT owed on seized goods and to help ensure a level playing field for compliant businesses.

This measure will only impact non-compliant traders.