Introduction

The case of McKeown & Ors v. Revenue And Customs ([2017] STC 294) addresses critical issues regarding the interpretation of the term 'holding' within the context of UK excise duty regulations. The appellants—Liam McKeown, Michael Duggan, and Thomas McPolin—are heavy goods vehicle (HGV) drivers based in Northern Ireland who were assessed substantial excise duties after being intercepted carrying alcoholic beverages with invalid documentation. The core legal questions revolved around whether the appellants were 'holding' the goods in the regulatory sense and whether their rights under Article 6(2) of the European Convention on Human Rights (ECHR) were breached.

Summary of the Judgment

The Upper Tribunal dismissed the appeals of all three appellants, upholding the decisions of the First-tier Tribunal (FTT). The tribunals concluded that each appellant was 'holding' the excise goods, thereby making them liable for the unpaid excise duties. The appellants contested this by arguing a misinterpretation of the term 'holding' and alleging breaches of their ECHR rights. However, the Upper Tribunal found no errors in legal interpretation or application by the FTT and affirmed that the appellants knowingly participated in fraudulent evasion of excise duty. Consequently, the assessments for excise duty were confirmed.

Analysis

Precedents Cited

The judgment extensively references several key cases to underpin its interpretation of 'holding' within excise duty regulations:

• R v May [2008] UKHL 28: Established that personal liability for evading duties requires the offender to be personally liable for the duty.
• R v White [2010] EWCA Crim 978: Clarified that mere possession without beneficial ownership does not confer liability unless there is control and intent to evade duties.
• Taylor and Wood [2013] EWCA Crim 1151: Determined that 'holding' implies de facto and de jure control over goods at the excise duty point, emphasizing responsibility for duty payment.
• Mackle [2014] UKSC 5: Highlighted that simply handling goods without obtaining a benefit does not equate to 'holding' for confiscation purposes.
• Tatham [2014] EWCA Crim 226: Reinforced that 'holding' involves control and intention to evade duties, not just physical possession.
• Gross v Hauptzollamt Braunschweig [C-175/14]: Supported the notion that drivers possess liability when knowingly involved in transporting dutiable goods.

Legal Reasoning

The court delved into the legislative framework underpinning excise duty, particularly Council Directive 2008/118/EC and the UK's Excise Goods (Holding, Movement and Duty Point) Regulations 2010. The term 'holding' was not explicitly defined in the legislation, necessitating reliance on jurisprudence. The Upper Tribunal embraced the interpretation from Tatham and Taylor and Wood, asserting that 'holding' entails the capability to exercise control over goods, coupled with knowledge of their dutiable nature. The tribunals found that the appellants, as drivers, possessed both de facto and de jure control over the seized goods and were aware of their nature and the associated duty obligations.

Impact

This judgment reinforces the liability of transporters and drivers in the execution of excise duty evasion schemes. By affirming that 'holding' encompasses both control and awareness, it places a legal onus on individuals in possession of dutiable goods to ensure compliance with duty regulations. Future cases will likely reference this decision to ascertain the extent of liability for parties involved in the transportation of excisable products, especially in scenarios involving fraudulent evasion.

Complex Concepts Simplified

'Holding' of Goods

In the context of excise duty regulations, 'holding' refers to having control over goods that are subject to duty. This control can be actual (de facto) or legal (de jure), meaning that even if the holder doesn't physically possess the goods, they hold enough authority to manage or direct them. Importantly, knowledge of the goods' nature and the associated duties is crucial in establishing liability.

Excise Duty Point

The excise duty point is the moment or location at which legal responsibility for duty payment arises. For imported goods, this typically occurs upon their arrival into the member state, at which point excise duty becomes payable.

Regulation 13 of the 2010 Regulations

This regulation delineates who is liable to pay excise duty on goods held for commercial purposes. It specifies that liability can fall on the person holding the goods, the person making their delivery, or the person to whom they are delivered.

Conclusion

The Upper Tribunal's decision in McKeown & Ors v. HM Revenue and Customs serves as a pivotal interpretation of 'holding' within excise duty law. By affirming that possession coupled with knowledge equates to 'holding' and thereby liability for duties, the judgment underscores the responsibilities of those involved in transporting excisable goods. This decision clarifies the extent of legal obligations for drivers and transporters, ensuring greater compliance and accountability in the movement of dutiable products across jurisdictions.