This is a House of Commons Committee Report.
Select Committee on Statutory Instruments
Date Published: 10 March 2023
At its meeting on 8 March 2023 the Committee scrutinised a number of instruments in accordance with Standing Orders. It was agreed that the special attention of the House of Commons should be drawn to one of those considered. The instruments and the grounds for reporting are given below. The relevant departmental memorandum is published as an appendix to this report.
1.1The Committee draws the special attention of this House to these Regulations on the ground that they are defectively drafted in two related respects.
1.2These Regulations, which are subject to the negative resolution procedure, implement updated EU laws relating to excise duties in Northern Ireland. Part 1 of Schedule 2 amends provisions of S.I. 2020/1559 that modify S.I. 2010/593 (the Northern Ireland Regulations).
1.3The effect of paragraph 32 is to insert into the Northern Ireland Regulations new regulations 63B to 63M, which impose duties on consignees and consignors, HMRC Commissioners, and specified third parties. Paragraph 38 ensures that those duties can be enforced by making several of the new provisions, including regulation 63K, liable to attract a civil penalty.
1.4It appeared to the Committee that including the whole of new regulation 63K would have two unusual effects: It would make a duty imposed on HMRC Commissioners subject to civil penalty (paragraph (2)). And it would allow a civil penalty to be incurred by breaching a duty relating to imports (paragraph (3)), but not by breaching the equivalent duty relating to exports (regulation 63E(9)). The Committee asked His Majesty’s Revenue and Customs to explain whether these outcomes reflect the policy intent.
1.5In a memorandum printed at Appendix 1, the Department acknowledges that both are errors (the duty imposed by regulation 63K(2) should not attract a civil penalty; the duty imposed by regulation 63E(9) should). It undertakes to make a correcting instrument at the earliest opportunity. The Committee accordingly reports paragraph 38(b) of Schedule 2 (new sub paragraph (c)) for defective drafting in two related respects, acknowledged by the Department.
The Committee has considered the instruments set out in the Annex to this Report, none of which were required to be reported.
S.I. Number |
S.I. Title |
Draft |
Economic Crime (Anti-Money Laundering) Levy (Amendment) Regulations 2023 |
Draft |
Major Sporting Events (Income Tax Exemption) (Women’s Finalissima Football Match) Regulations 2023 |
S.I. Number |
S.I. Title |
S.I. 2023/681 |
Value Added Tax (Margin Schemes and Removal or Export of Goods: VAT-related Payments) Order 2023 |
S.I. 2023/184 |
Post Office Horizon Compensation and Infected Blood Interim Compensation Payment Schemes (Tax Exemptions and Relief) Regulations 2023 |
1)The Committee has asked His Majesty’s Revenue and Customs (HMRC) for a memorandum on the following point(s):
In relation to the insertion – by paragraph 38(b) (new sub-paragraph (c)) of Schedule 2 – of regulation “63K” into the list of relevant regulations specified in Schedule 1 to S.I. 2010/593 for the purpose of attracting civil penalties, explain—
(1) whether it is the policy intent for contravention of the duty imposed on the Commissioners by regulation 63K(2) to attract a civil penalty (given that duties imposed on the Commissioners by adjacent regulations will not); and
(2) why the duty imposed by regulation 63K(3) in relation to imports of excise goods will attract a civil penalty, but the apparently equivalent duty imposed by regulation 63E(9) relating to exports of excise goods will not (63E(9) not being among the provisions to be specified in Schedule 1).
2)We confirm that it is not the policy intention for a contravention of the duty imposed on the Commissioners by regulation 63K(2) to attract a civil penalty.
3)We also confirm that it is the policy intention for a contravention of the duty imposed by regulation 63E(9) to attract a civil penalty.
4)We thank the Committee for bringing these errors to our attention; we apologise and regret that they were not identified before the instrument was made. We will update the entries in Schedule 1 dealing with regulation 63K and 63E by way of a correcting instrument at the earliest opportunity.
5)In the meantime, the transitional provisions (see paragraph 39 of Schedule 2 – new regulations “80B” to “80D”) ensure that the new computerised procedures, including requirements set out in regulation 63E, are not engaged until 31 December 2023, or other date specified by the Commissioners in a public notice.
His Majesty’s Revenue and Customs
28 February 2023
1)The Committee has asked HM Treasury for a memorandum on the following point(s):
Explain whether “a claim” in article 9(2)(a) is intended to bear the meaning in article 2(1) and include a claim made under articles 7 and 8, or only refer to a claim made under article 8.
2)This memorandum has been prepared by His Majesty’s Revenue and Customs on behalf of HM Treasury.
3)We confirm “a claim” in article 9(2)(a) was intended to only refer to a claim made under article 8. Article 9(1) limits the application of that article to where a claim has been made under article 8 and our view is that article 9(2)(a) should be read in that context. Although there may be scope for a different interpretation, we will apply article 9(2)(a) in accordance with our current view as it ensures that no stricter time limit is inadvertently imposed on the taxpayer.
His Majesty’s Revenue and Customs
28 February 2023
Jessica Morden, in the Chair
Peter Grant
Maggie Throup
Draft Report (Thirteenth Report), proposed by the Chair, brought up and read.
Ordered, That the draft Report be read a second time, paragraph by paragraph.
Paragraphs 1.1 to 1.5 read and agreed to.
Annex agreed to.
Papers were appended to the Report as Appendices 1 to 2.
Resolved, That the Report be the Thirteenth Report of the Committee to the House.
Ordered, That the Chair make the Report to the House.
Adjourned to a day and time to be fixed by the Chair.
1 The Committee asked for a memorandum on this instrument and a satisfactory response was received. The Department’s memorandum is printed at Appendix 2.