Isle Of Man Increases Excise Duty Enforcement

by Jason Gorringe, Tax-News.com, London

19 May 2011

The Isle of Man legislative assembly, the Tynwald tabled legislation to amend the Customs and Excise Management Act 1986 in line with United Kingdom legislation on May 17, which will increase scrutiny of revenue traders operating in the Isle of Man, and also tackle evasion of gambling duties.

The Act will come into force on a retrospective basis to April 1, 2011. The provisions are being implemented to align Isle of Man legislation with amendments made to UK law in the 2010 Finance Act.

The definition of a revenue trader, according to the Customs and Excise Management Act (CEMA) 1979, section 1, means:

• Any person carrying on a trade or business subject to any of the revenue trade provisions of the customs and excise Acts or which consists of or includes the buying, selling, importation, exportation, dealing in or handling of any goods of a class or description which is subject to a duty of excise (whether or not duty is chargeable on the goods), whether or not that trade or business is an excise licence trade, including a registered club; and
• Any person who is a wholesaler or an occupier of an excise warehouse (so far as not included in the categories listed above).

The amendments to the Isle of Man legislation make provisions about information and inspection powers, record-keeping and time limits for assessments and claims involving excise duties.

The major changes are as follows:

• Section 117 of the Act is amended to make clear that premises used for carrying on a revenue trade are liable to inspection regardless of their ownership;
• A new section 117A is inserted into the Act providing supplementary powers over premises used by revenue traders. This provides the power to inspect any business documents on the premises, and to mark any items examined during the inspection;
• Section 124A of the Act is amended and permits revenue traders to preserve records required by the Treasury in any form or by any means – subject to any conditions or exceptions imposed by the Treasury in writing;
• New sections 124BA to 124BD are inserted providing additional powers in connection with the protection of the revenue deriving from excise duties;
• New section 124BA allows the issue of a notice requiring information and documents, subject to the approval of the VAT and Duties Tribunal;
• New section 124BB ensures customs officers may enter and inspect any premises used in connection with excise duties on goods;
• New section 124BC provides powers for customs officers to enter and inspect premises where there is reasonable cause to believe they are being used for gambling liable to online gambling duty; and
• Section 144A of the Act is amended to take account of the existence of a four-year cap on recovery of overpaid excise duty, this applying only to repayments of amounts paid after March 31, 2008;

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