TC09158 - [2024] UKFTT 00369 (TC)

We heard oral evidence from Officer Davie. Officer Davie is a Higher Officer of HMRC. His duties include assurance and compliance work in the area of alcohol duties. Officer Davie was not involved in the Assessment, but has familiarised himself with the case in light of the retirement of the assessing officer (Officer Idowu), and has adopted the decision. In his oral evidence, Officer Davie adopted the contents of his witness statements, dated 14 July 2017, 4 October 2023 and 26 January 2024, as being true and accurate. He was not asked any further questions in examination-in-chief by Mr Carey.

Under cross-examination by Mr Boyle, Officer Davie stated that the first visit in 2012 by the FIS was by a different unit within HMRC, and that the assessing officer had not been involved in that investigation. Therefore, no assessment could have been raised at that point. The remainder of Mr Boyle’s cross-examination of Officer Davie can, more adequately, be described as statements that were more suited to his submissions. In this respect, Mr Boyle submitted that the third-party statements (from witnesses not called to give evidence) all appeared to be identical and did not describe the actual layout of the Appellant’s premises. He added that there were two other tenants on the Appellant’s premises/site and that the officers who visited did not speak to those tenants. Officer Davie stated that if he had conducted the Visit, he would have spoken to those tenants.

We then heard from Mr Boyle. Mr Boyle adopted the contents of his witness statement, dated 14 July 2017, as being true and accurate. In his witness statement, he described the Appellant’s business activity. He further explained that all commercial vehicles are weighed in and logged at the Appellant’s site, with copy records kept on the premises to comply with the Appellant’s EA permit (as well as the records of the weight, logs, vehicle registrations, details of the company name and of who owns the vehicle entering the Appellant’s site and details of the goods type being delivered or collected).

Mr Boyle added that Freedom Farm (the Appellant’s premises/site) is a secure location with only one way in and only one way out. All vehicles and personnel can only enter the site by crossing a bridge over a waterway, and then by entering a gate which is closed and locked each night to secure the site. He identified photographs of the site showing the entrance to the premises. He explained that once a vehicle goes through the Appellant’s weigh-in, the details of that vehicle have to be recorded. He further referred to photographs of the weigh - in area on site.

Mr Boyle emphasised that the recycling industry is a regulated industry, which requires all vehicles entering the site to be weighed, and for those records to be kept in accordance with the Appellant's EA permit. He reiterated that the Appellant does not deal in alcoholic beverages, at all, and never has. He stated that he was surprised to hear what he had been told by the assessing officer during the Visit as HMRC had said that a mistake had been made after the first visit, and he thought that that would be the end of the matter.He further stated that he had never heard of any of the third-party hauliers whose statements were being relied on as the basis of HMRC’s investigation and Assessment. In his witness statement, Mr Boyle referred to deficiencies that he had identified in the documentation relied on and referred to by HMRC (in respect of the third-party hauliers).

Mr Boyle’s written evidence was also that the assessing officer never asked to look around the site when the Visit took place in 2014. He added that the officer(s) who had attended on that occasion went straight to his office, and would not have been able to see the full extent of the site as all one can see out of the office windows are the front of other buildings. He further added that the officers asked him if he had heard about the third-party entities, and also asked about vehicles coming in and out of the premises in August 2012. He stated that he had advised them that the Appellant keep records and then showed them records of the vehicles entering, and leaving, the site on the relevant days.

Under cross examination by Mr Carey, Mr Boyle repeated that all vehicles are logged on arrival at the Appellant’s site, which has a moat at the entrance. He once again referred to that the weighbridge to the right of the entrance, and stated that lorries are ordinarily weighed by staff. He further added that staff then input the information into a record book and a handwritten weighbridge ticket is issued (which acts as a log for the Appellant’s records), but stated that there is no automated system in place. He confirmed that he was not responsible for managing the gate and accepted that he would have no way of knowing if staff at the gate were accurately recording information, or knowledge of whether the possible delivery of alcohol would have been recorded.

Mr Boyle accepted that there was nothing in the notes to the first visit in 2012 that indicated that HMRC accepted having made a mistake in respect of whether the Appellant had any involvement in excise goods. He also accepted that HMRC were still conducting an investigation when the Visit in 2014 took place. He could not, however, recall whether the consignment notes were discussed at that time, or whether he was handed any information about his rights. His position was that there as an inaccuracy in HMRC’s investigation and that the Assessment could have been raised prior to 2014.

Mr Carey then took Mr Boyle to the invoices obtained from the third-party hauliers and Mr Boyle accepted that, on the face of the documents, they showed the collection address for the Goods as being the Appellant’s address. He added, however, that the Appellant was a 90% tenant as there were two other tenants on site. He nevertheless stated that he did not speak to the other tenants to establish any anomalies in respect of their activities as that would have been a difficult conversation to have.

In respect of the Penalty, Mr Boyle disagreed that the Penalty had been correctly applied, but accepted that the criticisms he had made in respect of the Penalty was in relation to his opinion about the paperwork.

In response to questions for the purposes of clarification from the panel, Mr Boyle stated that he spends 90% of his time in his office (on the premises), and could only see the entrance to the premises when he looked out of the window as his desk faced away from that window. He added that another reason why he did not make his own enquiries with the tenants was that HMRC had walked around the premises in high visibility vests during the visit(s). He further added that there were 13 to 14 members of staff on the Appellant’s site.