Clause 338 - Approval of aerodromes

Finance No. 2 Bill – in a Public Bill Committee at 3:30 pm on 18th May 2023.

Alert me about debates like this

Question proposed, That the clause stand part of the Bill.

Photo of Graham Stringer Graham Stringer Labour, Blackley and Broughton

With this, it will be convenient to discuss clauses 339 and 340 stand part.

Photo of Victoria Atkins Victoria Atkins The Financial Secretary to the Treasury

These clauses make changes to strengthen HMRC’s framework for approving aerodromes and excise businesses. Clauses 338 and 339 deal with aircraft carrying passengers or goods into and out of the United Kingdom. These aircraft are required to land at or depart from a designated customs and excise airport, unless permitted by HMRC to use an aerodrome.

There are approximately 540 aerodromes in the UK, which may handle small private jets with passengers and goods under a duty allowance, with very limited movements of freight. The typical requirements placed upon customs and excise airports are not appropriate for these smaller locations.

The Government currently agree the certificate of agreement with aerodrome operators and that provides the permission required to land at these locations. The changes made by these clauses will strengthen the legal basis for the aerodrome approval process. First, clause 338 will allow HMRC to issue approvals to aerodromes for customs purposes, to attach conditions and restrictions to these approvals and to vary or revoke approvals where necessary. Secondly, this clause provides a power to allow HMRC to make regulations about approval conditions for aerodromes and civil penalties for non-compliance with approval conditions and restrictions. Finally, the clause will require operators of unapproved aerodromes to take reasonable steps to ensure that pilots and importers do not depart from or arrive at their aerodrome in contravention of legal requirements on aircraft movements into and out of the United Kingdom.

Clause 339 makes minor and consequential amendments.

Clause 340 concerns excise regimes. Colleagues may be aware that businesses in a several excise regimes operated by HMRC require approval to conduct certain controlled activities. Those include the alcohol wholesaler registration scheme and the raw tobacco approval scheme. Approval is dependent on a business continuing to satisfy certain fit and proper criteria. Where evidence shows that the business is no longer fulfilling that criteria, HMRC may as a last resort revoke its approval. The business may request an internal review of the decision by an independent officer and ultimately has the right to appeal to tribunal and higher courts, in which case a temporary approval may be given so that the business can carry on trading until the matter is finally determined.

Where the appeal matter is finally determined and revocation is upheld, a business may still hold some stock. Under existing legislation, the temporary approval will lapse once the appeal has been determined, meaning that the business will be unable to dispose of the stock without incurring a penalty. In some civil cases it may be reasonable to allow the business to legally dispose of stock after the revocation has been confirmed. The alternative would be the potential seizure of product and loss of associated duty revenue. This also brings appeal cases into line with non-appeal cases where a future date for the revocation to take place may be agreed where deemed appropriate. Cases where revocation of an approval is linked to criminal prosecution would not be considered.

The changes therefore create a new power to allow HMRC a discretion to extend temporary approvals in respect of the control schemes covered by certain regimes that contain similar fit and proper criteria. This does not alter the position that HMRC has judged the business to no longer satisfy the requirements to hold an approval.

Photo of James Murray James Murray Shadow Financial Secretary (Treasury) 3:45 pm, 18th May 2023

As we heard from the Minister, clauses 338 and 339 relate to regulated aerodrome approvals. Clause 338 introduces a power for HMRC to grant approvals to aerodromes for the purposes of the customs and excise Acts and to amend and revoke those approvals. The clause also introduces a requirement that operators of aerodromes take reasonable steps to ensure that no aircraft lands or departs in contravention of the Customs and Excise Management Act 1979.

Clause 339 introduces consequential amendments following the provisions of clause 338. The clauses together aim to strengthen aerodrome operator accountability by establishing an approval regime for aerodromes, which handle movements of people and goods and are not designated as customs and excise airports. We will not oppose the clauses.

Moving on to clause 340, excise businesses must be approved by HMRC to conduct certain controlled activities. HMRC can revoke a business’s approval where it fails to meet HMRC’s fit and proper criteria. Current legislation allows a temporary approval to be granted pending a review or appeal, and the temporary approval automatically ends once that review or appeal has finally been determined. We recognise, however, that that may cause hardship to an affected business as, after the final determination, there is at present no time for such a business to wind down its operations without incurring a penalty.

The measure has a new discretionary power to allow HMRC to extend a temporary approval following a final determination of a decision to revoke an approval, or a temporary approval granted during the review or appeals process. That will enable a business to wind down its operations without incurring a penalty, so we will not oppose this clause, either.

Question put and agreed to.

Clause 338 accordingly ordered to stand part of the Bill.

Clauses 339 and 340 ordered to stand part of the Bill.