What do you need to know?
- The new system replaces the “additional duty regime” and is designed to be fairer and more transparent and ensure that any charges are proportionate to the offence
- It is also clearer about when remission can be granted
- Compensatory interest and late payment penalties are different:
- compensatory interest compensates the Crown for loss of use of money, and applies whenever duty isn’t paid in full, including when it wasn’t assessed correctly, or on time
- late payment penalties apply to late payments, and aim to encourage people to pay on time
- The new system is based on Inland Revenue’s use-of-money interest and late payment penalties and will apply in the same way to both importers and excise licensees.
Who does this impact?
- Importers
- Excise clients
- Brokers.
What is the impact?
- Importers will receive an interest charge for shortfall payments, where previously no additional duty was charged
- There are strengthened incentives to voluntarily disclose shortfall payments
- Incorrectly claimed refunds/drawbacks will now attract interest, where previously there was no additional duty charge.