Kearney Transport Limited v The Commissioners for HMRC

Facts

Kearney Transport Limited is a bulk haulage company. On 27 July 2023 two of its vehicles were stopped at a ferry terminal for fuel testing under regulation 47(3) of the Hydrocarbon Oils Regulations 1976. The drivers, who were the company's employees, said that the trailers carried peat and produced paperwork describing "bulk peat shrub mix". When officers searched the vehicles, they found palletised beer instead: about 22,896 litres in one trailer and 25,956 litres in the other. The beer, vehicles and trailers were seized as goods held outside a duty-suspension arrangement on which no UK excise duty had been paid. HMRC then made enquiries of the drivers, the company and the named consignor and consignee. The company said that an Irish company, Legnakelly Transport Ltd, was responsible for the movement, and HMRC wrote to Legnakelly, which did not reply. On 4 June 2024 HMRC assessed the company to excise duty of £32,649 and £36,632 under s 12(1A) Finance Act 1994. It also imposed excise wrongdoing penalties of £12,569 and £14,103 under paragraph 4(1) of Schedule 41 Finance Act 2008, treating the behaviour as deliberate and the disclosure as prompted. A review officer upheld those decisions on 31 July 2024. The company appealed, arguing that while its directors were on holiday Legnakelly had been using its vehicles and drivers under an informal arrangement, so the company was not holding the goods.