HM Revenue & Customs (HMRC) recently published a consultation paper on proposals to crack down on traders who evade tobacco duty and other excise duties. Amongst other things, HMRC are proposing that landlords should be under a legal duty to take certain steps to prevent duty evasion.
HMRC propose that:
- HMRC would write to landlords and landowners’ associations asking them to voluntarily add a clause to their standard leases prohibiting illicit tobacco trading and other illicit excise trading.
- Landlords would be under a duty to ensure that their properties were not used for illicit trading.
- The duty of care would only arise if the landlord had previously been notified that the tenant had been involved in illicit excise trading. At this stage it isn’t clear what would amount to “notification” in this context. For example, would a person buying an already-tenanted property be treated as having the knowledge of his processor as landlord?
- Failure to comply with the duty of care could result in a civil penalty. A landlord who took reasonable steps to prevent future illicit trading would have a defence – for example, where:
- The lease could be terminated where there was illicit trading and the landlord evicts a tenant involved in such trading.
- A landlord conducted periodic checks on their premises.
The consultation closes on 12 May 2017.
We shall have to wait and see if the proposed changes are implemented. However, many may see these proposals as part of a worrying recent trend for politicians to pass the buck (and the cost) when it comes to law enforcement. Other examples are an employer’s duty to check the immigration status of potential employees and the duty of a landlord of residential premises to check the immigration status of potential tenants.