“Draconian” sanctions are increasingly being imposed on firms in the supply chain who make honest mistakes when dealing with non-duty-paid goods, the United Kingdom Warehousing Association (UKWA) has warned.

The UKWA said “crippling” duty assessments and fines were increasingly being levied on firms who make any procedural error relating to duty-suspended goods like tobacco, alcohol and fuel by HM Revenue & Customs (HMRC), following new rules introduced in 2010.

Alan Powell of Alan Powell Associates, UKWA’s advisor on excise matters, told Motortransport.co.uk that firms making honest mistakes potentially faced sanctions equating to three times the duty payable on such goods, including forfeiture of the goods themselves, 100% of the duty originally owed and a wrongdoing penalty of a further 100%. Such sanctions could put some firms out of business, he warned.

“Given that excise duty is so high, the risk of such liability can be damaging at best and catastrophic in the worst case,” he confirmed.

HMRC has acknowledged that the sanctions potentially faced by those unwittingly breaking the rules need reviewing, but no timescale has yet been agreed for any changes, added Powell.

A spokeswoman for HMRC declined to comment save to say the agency had “no specific campaign” to target supply chain firms.

Topics