Dealing with excise goods

When excise goods are moving within the European Union in excise duty-suspension, the movement must take place between persons and premises that have been approved for that purpose by the competent authorities in the Member State where they are based.

Guide

7 min read

1. Disclaimer

This guide contains information relating to the EU that may be out of date due to Brexit. We are working to update our guidance as the situation unfolds. For urgent assistance please contact your local Business Gateway office or visit https://www.prepareforbrexit.scot/.

2. Overview

The purpose of this guide is to explain the UK's requirements for businesses involved in the holding and movement of excise goods.

It provides a basic overview of the procedures that apply if you intend to receive or dispatch excise goods that are moving within the UK or throughout the European Union (EU). It covers the movement of both duty-suspended and duty-paid excise goods and gives guidance on what you need to do and where you can find further information.

3. Moving excise goods in duty-suspension

When excise goods are moving within the European Union (EU) in excise duty-suspension, the movement must take place between persons and premises that have been approved for that purpose by the competent authorities in the Member State where they are based.

Excise goods may only be moved in excise duty-suspension once they are in 'free circulation'. This applies to goods that have been wholly produced in the EU or goods that have been imported into the EU and have been released to free circulation on completion of all import formalities and payment of any customs duties.

Movement guarantees

Generally, excise goods that are moving within the EU in excise duty-suspension must be covered by financial security in the form of a movement guarantee. It is the consignor's responsibility to ensure that a valid movement guarantee is in place, with detail of the guarantee recorded on the appropriate movement documentation prior to the goods being dispatched in duty-suspension.

Excise Movement and Control System

All duty-suspended movements of excise goods taking place within the European Union (EU) must be recorded on the Excise Movement and Control System (EMCS) unless the goods are allowed to move under simplified procedures. EMCS captures and processes the information about the movement online, validates the data entered and allows real time notification of the dispatch and receipt of duty-suspended excise goods.

EMCS allows anyone who is approved to receive or dispatch excise goods in duty-suspension to exchange messages online with their EU trading partners about specific consignments and other movement information.

Registering and enrolling for EMCS using the HM Revenue & Customs (HMRC) Online Service

UK consignors and consignees of duty-suspended excise goods can use the free EMCS service on the HMRC website or use a commercial software package or other in-house option.

If you are not already registered and enrolled to use other HMRC Online Services you will need to do so before you can use EMCS.

You will need an Excise ID number, also referred to as the 'Excise Registration Number'. Your Excise ID number is quoted on the letter of approval or certificate of registration that approves you to dispatch and/or receive excise goods under duty-suspension arrangements. This number is also held on the System for the Exchange of Excise Data (SEED), which is the database used by EMCS to validate your approval.

4. Dispatching goods using EMCS

If you dispatch duty-suspended excise goods using EMCS, as the consignor you will need to complete and submit a message known as an electronic administrative document (eAD) through EMCS before the movement takes place. Once the detail entered on the eAD has been validated, EMCS generates a unique Administrative Reference Code (ARC) for that particular movement. As the ARC is required to travel with the goods, you must provide the person accompanying the goods (for example, the driver of the vehicle transporting the goods) with a printed version of the eAD or any other commercial document on which the ARC is clearly stated.

If you receive duty-suspended goods that are dispatched under EMCS procedures, you will need to access EMCS in order to receive notification about the expected consignment. Once the goods arrive, you should check the consignment against the eAD and then complete and submit a report of receipt through EMCS. If you discover shortages or surpluses on receipt, you should record this detail on the report of receipt. The report of receipt should be submitted through EMCS no later than five business days after the goods are received.

Movements of duty-suspended excise goods wholly within the UK

EMCS must also be used for duty-suspended movements of excise goods taking place wholly within the UK except for those involving energy products or where simplified procedures apply.

When energy products are moving within the UK in excise duty-suspension, they must be accompanied by a document known as a W8 or a commercial equivalent.

The UK simplified procedures

Simplified procedures allow certain duty-suspended movements taking place wholly within the UK to be accompanied by alternative movement documentation instead of under cover of an eAD generated through EMCS. This applies to the following duty-suspended movements.

5. Storing excise goods in duty-suspension in the UK

Excise goods that are in free circulation can only be stored in excise duty-suspension whilst in the European Union if they are held in approved premises known as tax warehouses. If you are based in the UK and intend to receive, store and dispatch excise goods in duty-suspension, you will need to have your premises approved as an excise warehouse, which is a specific type of tax warehouse. As the operator of the excise warehouse, you will also need to be approved as an authorised warehousekeeper.

An excise warehouse is any place of security approved by HM Revenue & Customs (HMRC) where goods liable for excise duty can be stored without payment of the duty for such periods and subject to such conditions as they see fit. Excise duty is suspended whilst goods are held in an excise warehouse but you must get permission from HMRC if you intend to store duty-suspended and duty-paid goods in the same premises.

The three categories of excise goods that can be held in an excise warehouse in duty-suspension are:

  • alcohol products including beers, wines and spirits
  • tobacco products including cigarettes, cigars and loose tobacco
  • energy products including hydrocarbon oils and biofuels for use as motor or heating fuel

Please note that HMRC does not allow UK manufactured tobacco products intended for use in the UK to be stored in an excise warehouse. Such goods can only be warehoused if they are intended for a duty-free purpose such as:

  • goods for export
  • for sale from an export shop
  • for supply to embassies within the UK
  • for use by visiting forces
  • for use as ships' or aircraft stores

6. Moving goods into and out of an excise warehouse

Excise warehousekeepers are responsible for accounting for all excise goods entering or leaving their warehouse premises.

The list below highlights some of your key responsibilities as an excise warehousekeeper when receiving excise goods in duty-suspension. For full details you should read Notice 197 on the HM Revenue & Customs (HMRC) website.

When receiving goods, you must:

  • ensure that your premises are approved to receive that type of goods
  • ensure that the owner, or their duty representative, is entitled to deposit the goods
  • place the goods in your warehouse without delay
  • enter the goods into your stock account records ensuring that all goods are adequately marked and identifiable in the warehouse
  • check all consignments have arrived intact
  • investigate any irregularities or indications of interference
  • discharge the movement by providing a report of receipt under Excise Movement and Control System (EMCS) procedures, or by endorsing and returning the certificate of receipt required for movements under simplified procedures, within the specified time limits

7. Dealing in duty-paid excise goods

If you intend to import into the UK, or arrange the importation of, excise goods that are duty-paid, or released for consumption, in another European Union (EU) Member State for a commercial purpose, the goods will be liable to excise duty in the UK. There are three different ways in which duty-paid excise goods can be imported into the UK for a commercial purpose:

  • the standard UK duty-paid scheme for unregistered commercial importers
  • the Registered Commercial Importer scheme
  • distance selling arrangements for sales to private individuals

Unless the goods are being dispatched under distance selling arrangements, movements of duty-paid excise goods between EU Member States must be covered by a three-part document known as a Simplified Accompanying Administrative Document (SAAD).

The standard duty-paid scheme

You do not need to be registered with HM Revenue & Customs (HMRC) to use this scheme. However, before commercially importing any duty-paid excise goods, you should notify HMRC by submitting a form HM4 at least 15 working days in advance of the intended date of each dispatch. You must secure the UK excise duty that is due on the goods by submitting your payment, in the form of a banker's draft, postal order or cheque, along with the HM4. HMRC will return the HM4 to you, endorsed with a unique reference number for that particular consignment.

Your supplier should not dispatch the goods until you have notified them of the unique reference number, which should then accompany the goods along with a completed SAAD. Under the standard scheme, the goods can only be delivered to your business premises, as stated on the HM4.

You must inform HMRC of any changes to the information you have supplied as soon as they occur, and certainly before the goods arrive in the UK. You must notify HMRC as soon as you receive the goods and then, within four working days, return the HM4 form to HMRC along with a copy of the receipted SAAD and, if appropriate, payment for any outstanding duty or VAT.

Read our guide on Importing goods from outside the EU.

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