|HMRC Reference:Notice 196 (October 2012)||View Change History|
Paragraphs 10.5 and 10.6 of this notice provide further details on risk indicators and outline some of the checks that you may carry out to identify high risk transactions. Please note these are not intended to be prescriptive or exhaustive. Once you have established the most appropriate due diligence tests for your business, these should be used to test both new and existing transactions and supply chains linked to your business. Some checks may be more appropriate to your business than others.
This notice cancels and replaces Notice 196 (October 2012).
The notice has been amended to:
This notice explains the United Kingdom’s (UK) requirements for the warehousing of excise goods held in duty-suspension within the UK.
You should read this notice if:
Notice 197 deals with the receipt into and removal from warehouse of excise goods in duty-suspension and should be read in conjunction with this notice.
When we directly refer to the law in this notice, we will show the standard abbreviations, for example, CEMA 79, with the full title given in section 12.
As an authorised warehousekeeper, registered owner, duty representative or registered consignor you have obligations under the law, and failure to fulfil these obligations or observe any condition of your authorisation and approval could result in one or all of the following:
In addition, where there has been a breach of our regulations, any goods concerned may be liable to forfeiture, or you may be liable for the excise duty on missing goods.
You must be authorised to deal in duty-suspended goods. To be authorised as an excise warehousekeeper, approved as a registered owner, duty representative or registered consignor you need to contact HMRC.
We regularly review the compliance of existing authorised excise warehousekeepers and excise registered businesses and robustly challenge all new applications.
The law allows us to decide whether to:
Only persons who can demonstrate that they are fit and proper to carry out an excise business will be authorised or registered.
Failure to apply for authorisation or approval at the correct time can attract a financial penalty. You can avoid financial penalties by applying for excise warehousekeeper, excise warehouse premises, registered consignor, registered owner or duty representative approval at the correct time.
We will visit the authorised excise warehousekeeper and the approved premises of excise goods in duty-suspension to carry out checks on the:
HMRC controls consist of both audit based and physical checks. While our officers are on your premises you must make sure their safety in line with the various Health and Safety Acts. If you do not provide safe access to your premises and warehoused goods, we will restrict or withdraw your authorisation.
This notice contains our general requirements for the approval of premises, authorisation of warehousekeepers, approval of registered owners, duty representatives and registered consignors. For certain trade facility warehouses additional information is contained in Notice 39 Spirits production in the United Kingdom, Notice 179 Motor & heating fuels: General information and accounting for Excise Duty and VAT, Notice 197A Excise goods: Holding and movement (Export Shops) and Notice 197B Excise goods: Aircraft store floors.
If you are the warehousekeeper you must display prominently, the warning poster Notice 50 Duty-free warehouse warning at each entrance and exit to the warehouse site. You can download the notice from our website.
Notice 50 explains that excise goods in the warehouse may be duty-suspended. It warns that, by improperly removing these goods, anyone can incur severe penalties or imprisonment.
From 1 November 2014 registered excise businesses must make sure that they are carrying out appropriate due diligence checks on their suppliers, customers and supply chains. Further information on due diligence can be found in section 10.
We will normally arrange appointments to visit your premises, but may also make unannounced visits, particularly when undertaking physical checks. You must permit HMRC officers access to any area of the excise warehouse during warehouse operating hours or at any time when activity is taking place at the excise warehouse. All HMRC officers carry identification which they will produce upon arrival or on request.
Prior to applying for authorised excise warehousekeeper status you should make sure that you are aware of the obligations and conditions which HMRC imposes upon excise warehousekeepers.
Do not assume that we will automatically authorise you as an excise warehousekeeper.
To apply you must complete Form EX61 Excise Warehousekeeper - Application for Registration which is available from the HMRC website. If you are a partnership you must also complete form EXCISE 102.
The application form must be completed and signed by a responsible person within the business. This will either be:
Completed forms should be returned to the National Registration Unit (NRU). You will find contact details for the NRU and other offices at the end of this notice.
You must apply at least 45 working days before the date on which you wish your authorisation to begin. This is to allow us time to carry out the necessary verification and pre-approval checks, which will normally include a visit to your place of business.
Your application will be vetted and is subject to background checks. Should these checks provide insufficient assurance that the business is suitable for authorisation, further information may be requested. Until this information is received, your application will be put on hold.
It is important that all applicants receive a pre-approval visit so that HMRC may obtain information to assist in the processing of the application.
During the visit we will examine all the business’ activities and may enquire about your suppliers, customers, business plans, accounting systems, premises, financial viability, and so on. Only when we are satisfied the business is a genuine enterprise which is commercially viable, with a genuine need for authorisation and that all key persons are fit and proper to carry on such a business, will we process the application.
Reasons for refusing an application may include circumstances where:
The above list is not exhaustive. If we are not satisfied with the information provided to us, we may refuse to authorise you. In addition, if you fail to provide us with the information requested, we will place your application on hold until the information is received. We will notify you of the reason or reasons for the refusal.
As part of the procedure for authorising you as a warehousekeeper you must demonstrate that you have the ability to keep the commercial records as laid down in Notice 206 Revenue traders records, ensuring that all information is permanent and legible.
Your records must show details of all excise goods received, stored in and removed from the excise warehouse.
The warehousekeeper must normally also register for access to the Excise Movement and Control System within the online services offered by HMRC. Access to EMCS will be required for dispatching and receiving goods using this system. Full details of the procedures for receiving and dispatching excise goods in duty suspension under EMCS are contained in Notice 197.
You will not necessarily need any special IT systems; however, you will need access to the Internet to be able to access EMCS. EMCS can be accessed either through the Online Services section of the HMRC website, or by purchasing an IT system, from a suitable software supplier, which is capable of directly interfacing with EMCS.
Whichever system you choose, you will first need to register for access to our Online Services. Guidance on how to do this is provided on the Online Services homepage. (If you are already registered for Online Services for another reason, you do not need to re-register). You will then need to add EMCS onto the list of services you wish to have access to. This request may take up to seven days to process, as your activation token will be sent to you through the post.
Please note that when you register for our Online Services you will be sent an Activation Token that is valid for 28 days - if you do not use it within this time you will need to re-register with Online Services. Full details can be found via our website.
It is important that you register for EMCS using your warehousekeeper identity and not your warehouse premises identity. If you register with your premises identity you will not gain access to EMCS and will have to re-register using your warehousekeeper identity which may take up to seven days for HMRC to process.
We allow the use of manual records; however, if you use loose-leaf stock records you must serially number the pages.
As a minimum, your stock accounts must show:
Additional record keeping requirements for certain trade facility warehouses may be required. Refer to section 2 for detail of the additional notices relating to other types of trade facility warehouse.
If you wish to use computers for stock control and/or accounting purposes, you should include this request in your application for approval, providing full details of the system you intend to adopt. The standard of records stored on your computer must be equivalent to that required if you were to use manual records.
HMRC does not endorse a specific software package and advises that the software packages which are used in one warehouse may not be appropriate for use elsewhere.
Should your authorisation application request permission to use computer versions of official forms, please include copies of these forms with your application so that we can make sure they meet our requirements.
When considering granting approval to use your specified software package we require:
You must make sure that safeguards exist to protect your system from inadvertent corruption. If necessary, we request that you:
You must mark all excise goods, so that you can identify them in your stock accounts. Excise goods must have clear and tamper-proof markings at all times whilst in your excise warehouse, from arrival to removal from the duty-suspension system. You may use any system which meets this requirement (for example, bar coding), providing that you can establish an audit trail.
A stock account must show the following details:
You must make sure that:
You should keep all excise goods in clearly identified locations so that you can readily trace them to the stock account. You must note the appropriate stock account whenever you move excise goods to a new location in the excise warehouse.
You must check the accuracy of your stock by undertaking a satisfactory inventory-checking system as agreed with us and by complete stocktaking at reasonable intervals.
You must take stock of all excise goods in the excise warehouse:
We may ask you to produce all stocktaking records and working papers. If you do not carry out stock control measures, we may restrict or even cancel your excise warehouse approval.
We may ask you to carry out a stocktake if there is reasonable cause to do so. In such circumstances we will give you written instructions.
As an authorised warehousekeeper, you are responsible for the care and control of the goods in your approved sites. You must take all necessary steps to control and safeguard your stocks and investigate and examine critically all losses and deficiencies.
Failure to report notifiable losses immediately is a serious breach of your conditions of approval, and could lead to its revocation.
We will charge duty on losses and deficiencies of excise goods in your warehouse unless you can show us that they are due to natural causes or accident. Normally, we will issue an assessment to the warehousekeeper for any duty due.
Only if you can demonstrate that stock losses and stock surpluses are related (for example, the product is similar but stock rotations differ), can you request off-setting. Your records and accounts must contain a clear audit trail to justify any adjustments of stock records following the discovery of any errors. You must be able to justify each offset. We do not allow you to accumulate losses and surpluses from various sources and then offset gross totals against each other.
If at any time you discover a discrepancy in your stock you must immediately contact the Excise and Customs Helpline on 0300 200 3700.
It is a serious offence to conceal any deficiency, surplus or other discrepancy.
If we accept your application, we will issue a certificate of authorisation. You should check the accuracy of the details on the certificate which should be kept in a safe place and made available to our officers on request. Any inaccuracies should be reported to the NRU immediately. All the excise warehouses which you are authorised to operate will be listed on the reverse of your certificate, plus details of any conditions that we have placed on your authorisation.
If we refuse your application, we will inform you in writing and give our reason or reasons. We will offer you a review of our decision or you can appeal direct to the independent tribunal (see section 11).
You must tell the NRU within seven days if any information contained on your certificate of authorisation changes. When you receive a replacement certificate, you must destroy the previous certificate, or we may impose a financial penalty.
If the status of your business or the company changes (for example, a sole proprietor becomes a partnership or all the approved excise warehouses are transferred to a company which is not an authorised excise warehousekeeper), the new legal entity must apply to become an authorised excise warehousekeeper.
In addition, if there is any change in the directors of the company, we retain the right to review the authorisation after considering the criteria set out in paragraph 3.2. Following this review your authorisation may be withdrawn or have conditions added.
We will not automatically authorise the new applicant.
You must write to the NRU at least 30 days before the date you want to cancel your authorisation. On the date of cancellation, you must destroy your certificate of registration or we may impose a financial penalty.
Unless the duty-suspended stock is transferred to another approved excise warehouse before the cancellation date, excise duty becomes due.
We can withdraw or vary your authorisation immediately, at any time, for reasonable cause. If we decide to withdraw your authorisation, as a concession, we may give you a period of notice.
If we withdraw your authorisation we will inform you in writing giving our reasons for our action. We will offer you a review of our decision or you can appeal direct to the independent tribunal (see section 11).
You must destroy your certificate of registration on the day your authorisation ceases.
Unless another authorised excise warehousekeeper agrees to operate the premises with immediate effect, you will be liable for the duty on all the stock in your excise warehouse. Any changes of authorised warehousekeeper must be notified to the NRU within adequate time for the change to be made.
Even if you lodge an appeal against the withdrawal of your authorisation you will cease to be an authorised excise warehousekeeper from the date of the withdrawal.
HMRC will consider three types of premises approval - general storage and distribution warehouses, trade facility warehouses and motor and heating fuels warehouses.
In order for HMRC to consider approving your premises as a general storage and distribution warehouse you must:
A trade facility warehouse is a warehouse approved for a specific purpose that is required to be completed within an approved warehouse to maintain the duty-suspension chain. Any application for a trade facility warehouse must fully detail the purpose for the application and why this purpose can only be completed within duty-suspension. Such purposes may include:
The above list is not exhaustive and we have given examples here only.
We will in the first instance examine why your request can only be completed in duty-suspension. If there is no valid reason for the request, or the operation could be performed after the goods are released for consumption, the application will be rejected.
Additionally, if approval is granted, we will restrict any approval as a trade facility warehouse to the specific trade need as detailed on your application; for example, we will limit your approval to a bottling operation. This means we will include in your approval the time period that duty-suspended goods may be stored on the premises before and after the actual period for which the trade facilitation purpose is allowed to take place. Once the purpose of the trade facilitation has been completed, the goods must either be duty-paid or removed in duty-suspension to a warehouse approved to store such goods or exported outside the UK.
You will not be allowed to receive, hold or move duty-suspended excise goods outside of the trade facilitation granted.
Trade facility warehouses do not have to meet the throughput levels of a general storage and distribution warehouse. HMRC will not approve a general storage and distribution warehouse as a trade facility warehouse just because it does not meet the throughput criteria.
A motor and heating fuels warehouse is premises where mineral (hydrocarbon) oil, biofuels and special energy products may be stored in duty-suspension.
These warehouses are approved for a specific purpose and specified products, and are normally required to provide a minimum of one million litres bulk storage capacity. Further details about the conditions and requirements that apply can be found in Notice 179.
If you wish to apply for approval as an excise warehouse you should complete form EX68 (for general storage and distribution), EX69 (for trade facility) or EX70/71 (for motor and heating fuels). If you are a partnership you must also complete form EXCISE 102. All forms are available from the HMRC website. Please refer to paragraph 3.1 for detail on who should complete and sign the application forms.
Completed forms should be sent to the NRU as soon as possible. We aim to process applications within 45 working days of receipt at the NRU.
In order to operate an excise warehouse, you must be an authorised warehousekeeper (see section 3).
When you apply you must include:
Prior to approving the premises an HMRC officer will visit you, at which point you must satisfy us of all of the following:
For trade facility warehouse approvals, you must provide full details of the trade facility that you are applying for and be able to demonstrate why such an operation must be completed in duty-suspension
You must also be able to fulfil any further conditions HMRC may reasonably apply.
You should not assume that we will grant excise warehouse approval for your premises. Therefore, in your own interests you should not:
For the purposes of this notice, a premises guarantee is a guarantee given by an approved guarantor (for example, a financial institution) who undertakes to pay money to HMRC in the event of a chargeable loss being detected with regards to warehoused goods, where the person with the prime (or joint and several) liability fails to pay that duty.
Authorised excise warehousekeepers should contact the Financial Securities Centre (FSC) for further details about applying for a premises guarantee. You will find the contact details for the FSC at the end of this notice.
Guarantees are the only form of security acceptable to HMRC. We will issue the draft guarantee form to you when we have agreed your level of security. If you disagree with the level of the guarantee you have the right to an independent review of our decision.
You must ask your guarantor to complete the guarantee form and return it to the FSC. If satisfied we will accept the guarantee and return a signed copy to the guarantor.
Only companies approved by HMRC may act as guarantors. Most banks and insurance companies have this approval, but if you wish to check a particular company please ask the FSC.
A guarantee is valid only when the named principal has a permanent place of business or residence in the UK.
The cost of maintaining the guarantee is a commercial arrangement between you and the guarantor.
Your completed guarantee will form a part of your application for approval of your premises.
You should be aware that your liability is not restricted to the size of the guarantee. We can assess the person with prime liability, or notify a joint and several liability, for all outstanding duty arising from any chargeable loss in the warehouse. These liabilities may be significantly greater than the size of the guarantee.
The authorised warehousekeeper (or an associated or parent company) must provide the premises security.
For general storage and distribution warehouses and motor and heating fuel warehouses, we will base the level of security on the potential duty due on your average end of month stock calculated over a twelve-month period, allowing for any seasonal variations. For trade facility warehouses we base our calculations on the proposed or current throughput levels.
Potential duty on month-end stock holding
Level of security
>£100,000 but <£400,000
>£400,000 but <£1m
25% of potential duty
>£1m but <£25m
>£25m but <£100m
1% of potential duty
The minimum level of security for new general storage and distribution warehouses is £250,000.
We offer a reduction of the guarantee levels for established traders in certain circumstances. We only allow this if we have made no claim against the security and no significant irregularities have been identified in the operation of the excise warehouse during a specified period.
In the following circumstances we may allow reductions for premises security:
If the principal has
And we have
The level of security is reduced
Provided security for the two previous consecutive years.
Made no claim against the security and no significant irregularities have been identified.
Provided security for the previous four consecutive years.
Made no claim against the security and no significant irregularities have been identified.
No guarantee is required.
Where the principal qualifies for a reduction in the level of security and the new security required would be less than £100,000, no security is required.
Should you be entitled to a reduction, please write to the FSC stating the grounds for your request.
Where we are obliged to make a claim against a reduced level of security, we will issue a ‘notice of withdrawal’ to the guarantor and principal. The level of cover provided by the replacement guarantee will revert to at least 100% of the amounts shown above for premises security.
Unless you (as the authorised excise warehousekeeper) have applied and been granted a reduction in the level of premises security, the level of premises guarantee must be reviewed at least every six months. You must keep a record of this review.
As an authorised warehousekeeper you must write to the FSC if your trading pattern changes as it could result in an increased level of guarantee.
We may carry out similar checks to make sure that your level of security is satisfactory and could therefore ask for additional security as a condition of your approval if we identify a weakness in your system or consider your trading pattern has altered.
A change in trading pattern could also mean a reduction in the level of security required. If you consider that you qualify for a reduction you should write to the FSC stating the grounds for your request.
If you are a principal you can apply for a single guarantee covering more than one set of premises or to cover both premises and duty-suspended movements. In such circumstances, the month-end stockholding of all your excise warehouses and the amount of movement guarantee must be totalled to calculate the size of the security.
Multi-site security of premises/companies, in conjunction with a movement guarantee, gives commercial benefits in terms of the overall level of security required. However, it carries additional risks in that one significant irregularity on the part of any of the company’s activities would result in the loss to the entire group of any reductions granted, or result in the cancellation of your entire guarantee.
Once we are satisfied that the premises meet all our requirements and that you or someone else have been accepted as the authorised excise warehousekeeper, you will receive an approval letter which sets out the conditions of your approval. For excise warehousekeepers trading with other EU countries, the approval letter will also indicate that your premises are approved as a tax warehouse. You will receive one copy of the approval letter for your records.
HMRC may not grant an excise warehouse premises approval if:
The above list is not exhaustive.
If we cannot approve your application, we will inform you in writing and give our reason or reasons. We will offer you a review of our decision or you can appeal direct to the independent tribunal (see section 11).
HMRC will grant new premises approvals for an initial maximum period of twelve months, during which time we will carry out checks to make sure that your business meets the required throughput levels/trade facility need and that you are complying with all the conditions of your approval.
During the first twelve months, you must observe all the conditions specified in the warehouse approval letter. If you do not comply with all the conditions of your approval we may add to or vary those conditions, withdraw your approval and consider imposing financial penalties.
Only if we are satisfied that you are operating your excise warehouse in an acceptable manner will your premises approval be extended. If we have any doubts over the validity of the business or you have not fully complied with the terms and conditions set out on your premises approval or excise warehousekeeper registration, we may immediately cancel the approval or renew your approval for a further limited period, at which point we will carry out a review of your activities.
You should be aware that any premises approval only covers the premises named in the approval. If you wish to open another excise warehouse to hold duty-suspended goods, you must write to the NRU quoting your excise warehousekeeper authorisation number. If you wish to occupy premises which are currently approved under another approval, you must also hold the endorsement of the current excise warehousekeeper to transfer their premises to you. We consider this a request for approval of a new excise warehouse. You will be required to supply the same level of information presented for any new premises application. You will need to check your level of premises security and if necessary arrange for a higher level of security.
We will not grant any new approval until we are satisfied that you can provide adequate security.
If you require HMRC to vary the terms of your warehouse approval either temporarily or permanently, you must complete form EX68, EX69 or EX70/71 as early as possible. You must state what you require and why. Examples may include:
If you currently provide premises security, you must check the level of your guarantee and if necessary arrange for a higher level of security. We will not grant any new approval until you can demonstrate that you are able to provide adequate security.
We will advise you of our decision in writing within our published Charter Standards.
Any structural additions or alterations to approved areas, other than routine repairs, would be treated in the same manner as a ‘variation’ to your existing approval.
It is in your own interests to receive our written consent before you start any work as a failure to advise HMRC of any alterations or additions to the structure of the warehouse may result in your approval being withdrawn.
If you can provide evidence that you have a need for additional storage space (for example, due to seasonal demand), then we will consider permitting you to use additional premises under the terms of your main excise warehouse approval. We call such additional premises an ‘annexe warehouse’. We do not specify the distance between the main excise warehouse and any additional premises but you must comply with all the conditions of the main excise warehouse approval. If you cannot do this you will have to seek separate approval for the additional excise premises. All the conditions contained within your main excise warehouse approval will apply to any annexe excise warehouse we permit you to use.
Under certain conditions, we will allow you to store different classes of excise goods on a single approved site. This is known as ‘co-storage’. You must write to the NRU asking us to vary your excise warehouse approval.
You may store goods:
You must satisfy us that your accounting system is capable of:
Your system must make sure that duty-paid goods cannot revert to duty-suspended status and that duty-suspended goods cannot be shown as duty-paid without prior payment of duty.
All excise goods must be received at the main excise warehouse and removed from the main excise warehouse. In addition, you must account for all receipts and complete any removal documentation at the main excise warehouse.
We do not specify the distance between the main warehouse and any additional premises but you must comply with all the conditions of the main warehouse approval. If you cannot do this you will have to seek separate approval for the additional premises. Any additional premises are approved under the terms of your main warehouse approval and are not excise warehouses in their own right.
You must apply for a separate warehouse approval for your additional premises if you wish to receive goods into or send goods out from the additional premises.
If you currently provide premises security, you will need to check the amount of your guarantee. If necessary, you must arrange for a higher level of security.
You must also:
In the case of mineral (Hydrocarbon) oils, the above requirements only apply to floating storage that has been approved in conjunction with a Motor and Heating Fuels (bunkers only) Export Warehouse (see Notice 179).
An approval does not automatically continue if an authorised excise warehousekeeper sells or transfers their warehouse premises.
In such cases the prospective new excise warehousekeeper must apply for a new warehouse approval in accordance with paragraph 4.4.
If you require your excise warehouse approval to continue beyond its specified date, you must apply to the NRU for renewal at least two months before your approval expires.
We may not renew your approval when:
If we cannot renew your approval, we will inform you in writing and give our reasons. We will offer you a review of our decision or you can appeal direct to the independent tribunal (see section 11).
Even if we have granted approval with an expiry date, we will still advise you in writing of the cancellation of the approval, giving at least three months notice and the reason or reasons for our decision.
Section 92 of CEMA 1979 allows HMRC to cancel warehouse premises approval at any time if there is reasonable cause.
In particular, we will cancel an approval if a premises guarantor has advised us that they are withdrawing from their guarantee arrangements and you are unable to provide a replacement premises guarantor.
If you fail to comply with any piece of legislation concerning the holding and movement of excise goods or any condition attached to your approval, we may cancel or vary your approval. In such circumstances we will also cancel your authorisation as an excise warehousekeeper. Under Regulation 20(2) of the Warehousekeepers and Owners of Warehoused Goods Regulations 1999, excise duty becomes due on all excise warehoused goods unless another authorised warehousekeeper takes over the responsibility for the premises with immediate effect.
We will give you three months notice of revocation of an excise warehouse approval. In exceptional circumstances this notice period can be reduced if we decide it is necessary.
Before the date from which your approval is cancelled you must remove all duty-suspended goods from your excise warehouse by either paying the duty, moving the goods to another approved excise warehouse or removing the goods for a purpose which does not attract duty.
You must comply with any conditions we impose, pending a review or appeal of the cancellation.
Any duty-suspended goods remaining in the excise warehouse after the date of closure will be liable to forfeiture.
As an excise warehousekeeper, before you accept goods into your warehouse you must make sure that:
All owners of duty-suspended excise goods must obtain approval and registration, unless:
Registered excise owners and duty representatives must produce their registration certificates to you as the authorised excise warehousekeeper. If we issue an amended or varied certificate to an owner or duty representative, a copy of the new certificate must be provided to every excise warehousekeeper in which the owner’s excise goods are stored. The certificates will contain details of any conditions imposed by us.
We will confirm the validity of any registration if an excise warehousekeeper supplies the NRU with the name and registration number on the certificate.
We will not give out any information regarding conditions or restrictions; however, these details will be on the registration certificate provided to you as the registered owner. We will keep a record of your request.
To apply for approval to own excise goods in an excise warehouse you must have a UK business address and apply on form EX60 Owners of duty suspended goods held in excise warehouses - application for registration.
An owner is considered to be a sole proprietor, a partnership or a limited company. If you are a partnership you must also complete form EXCISE 102.
Please refer to paragraph 3.1 for detail on who should complete and sign the application form.
You must send an up to date business plan with your application. You may be requested to send further additional business papers to substantiate your application. When all the requested information is held by HMRC we intend to process your application within 45 working days.
If you are unable to provide a business plan or other requested information you should contact the NRU. Failure to do this will result in your application not being processed until this information is received.
If you do not have a business address in the UK, you will be unable to keep the goods in an excise warehouse for more than the initial period, which is 72 hours (excluding Saturdays, Sundays and other specified days), after which duty is due on the excise goods.
If, as an overseas owner, you wish to hold excise goods in duty-suspension beyond this time you should appoint a duty representative.
In considering your application, HMRC will follow the guidelines set out in paragraph 3.2 of this notice. If any applicant provides false or misleading information on the application form, we may:
When you apply you must advise us if you or any key personnel in the business have an unspent conviction under the Rehabilitation of Offenders Act 1974 (ROA), other than minor motoring offences, or if you have accepted a compounded settlement during the preceding three years.
If you have previously been registered as an owner or a duty representative you must tell us, supplying your previous registration number, name and address.
As a part of our registration procedure we will ask for further information about you and your business. If you fail to supply this information we will place your application on hold until this information is received.
If we accept your application, we will issue you with a certificate of registration. The certificate will contain the following information:
You should quote the unique registration reference number on all correspondence with HMRC in connection with your registration. You should also have it available when contacting us.
If we do not accept your application, we will inform you in writing and give our reasons for the rejection. We will offer you a review of our decision or you can appeal direct to the independent tribunal (see section 11).
Duty representatives must have a business or other fixed establishment in the UK and may only represent non-UK based owners. HMRC refers to such owners as your ‘principals’. Anyone wishing to act as a duty representative should apply on form EX64. If you are a partnership you must also complete form EXCISE 102. Please refer to paragraph 3.1 for detail on who should complete and sign the application form.
Duty representatives must, prior to acting for an owner, carry out checks to make sure that any owner that they represent does not have a business establishment or fixed address in the UK. A duty representative will be expected to retain evidence that they have carried out such checks on each principal before they act for them.
Failure to complete these checks and hold the required evidence will result in the duty representative’s registration being revoked and may also affect any other excise registrations or approvals they hold.
All owners and duty representatives must comply with the conditions and restrictions detailed in this notice. In addition, we may apply specific conditions (for example, restrictions of the type of goods that can be warehoused) which we will list on your certificate of registration.
Guarantees are the only form of financial security acceptable to HMRC. We will issue the draft guarantee form to you when we have agreed your level of security. If you disagree about the level of guarantee you have the right to a review of our decision or you can appeal direct to the independent tribunal (see section 11). You must ask your guarantor to complete the guarantee form and return it to the FSC. If satisfied, we will accept the guarantee and return a signed copy to the guarantor.
Only companies approved by HMRC may act as guarantors. Most banks and insurance companies have this approval, but if you want to check a particular company please ask the FSC. A guarantee is valid only when the named principal has a permanent place of business or residence in the UK.
The cost of maintaining the guarantee is a commercial arrangement between you and the guarantor.
You should be aware that your liability as principal is not restricted to the size of the guarantee. We can assess you for all outstanding duty arising from any irregularities in the warehouse. These liabilities may be significantly greater than the size of your guarantee.
We may cancel your registration at any time. If we do so, then we will inform you in writing and give our reasons for the cancellation. We will offer you a review of our decision or you can appeal direct to the independent tribunal (see section 11).
When your registration is cancelled, you must immediately destroy your certificate of registration and inform every excise warehousekeeper in whose excise warehouse your goods are deposited. You cease to be a registered owner the instant we cancel your registration.
If you are a revenue trader and your registration is cancelled you (the owner) will be jointly and severally liable with the excise warehousekeeper and the person or persons who owned the excise goods immediately before and after the excise duty point (and any duty representative of either of the owners), for the excise duty due.
However, if you are not a revenue trader and your registration is cancelled your goods can remain in duty-suspension in the excise warehouse.
If you wish to cancel your registration you must write to the NRU at least 30 days before the date on which you require HMRC to cancel your registration.
If we agree to cancel your registration, we will inform you in writing.
On the date of cancellation you must destroy your certificate of registration.
If the legal status of your business or company changes (for example, a sole proprietor becomes a partnership), the new legal entity must apply to become a registered owner prior to taking ownership of the excise goods. We will not automatically approve the new applicant. In addition, if there is any change in the Directors of the company, you should inform the NRU immediately. We retain the right to review the registration after considering the criteria set out in paragraph 3.2. Following this review, your registration may be withdrawn or have conditions added.
For any changes to the details contained on your certificate of registration (for example, change of address) you must advise the NRU in writing within seven days of the change taking effect. We will provide you with a new certificate. Within seven days of receipt of the replacement certificate, you must provide a copy of it to every excise warehousekeeper in whose excise warehouse your excise goods are deposited. Failure to notify changes to the details shown on your certificate of registration may result in the issue of a financial penalty.
You must destroy the previous certificate as soon as you receive the replacement certificate.
The owner or duty representative of excise goods stored in an excise warehouse must inform the excise warehousekeeper in advance when any duty-suspended goods are sold in warehouse.
The new owner must produce their registration certificate to the warehousekeeper, which will contain details of any conditions attached to the registration.
If the new owner is a revenue trader but not registered with us, the duty becomes immediately due to HMRC. The warehousekeeper, the buyer and the seller will be jointly and severally liable for the duty. In your own interests, if this happens, you should advise the Excise and Customs Helpline immediately.
Similarly, an overseas owner of duty-suspended goods must give you 72 hours notice of a change of their duty representative. They must also give 72 hours notice of the change to their duty representative.
Confirmation of the validity of the registration can be obtained from the NRU.
Owners and duty representatives who have been paid or expect to be paid by customers in cash for the sale or supply of duty-suspended alcohol products (that is, spirits and spirits-based beverages, beer, wine, made-wine, cider and perry) exceeding £9,000 (or equivalent in other currencies) must complete form W7 Notification of cash payments for alcohol goods or alcohol related services in duty suspension and send this immediately (without undue delay) by fax or email to the number or email address shown on the W7.
This form must be fully completed in accordance with the notes on the reverse.
Where duty-suspended alcohol products are transferred to approved excise warehouses in the UK or other EU Member States, form W7 must be submitted prior to the removal of the goods from the dispatching warehouse.
It may be commercial practice for customers to pay cash in two or more instalments which individually are below the £9,000 notification threshold but the total sale will exceed this amount. In such circumstances owners and duty representatives must notify HMRC on form W7 when the first cash payment is received.
Failure to notify qualifying transactions to HMRC may result in the issue of a financial penalty with persistent failure resulting in the withdrawal of the registered owner’s or duty representative’s approval.
Liability of warehousekeeper
A warehousekeeper accepts goods contrary to any conditions shown on his certificate of registration or approval letter.
Time of deposit.
Goods remain in a warehouse after the authorisation ceases.
Time when authorisation ceases.
A warehousekeeper accepts goods but does not see the required certificate of registration. During the Initial Period he removes the goods to a purpose other than home use.
Time of deposit.
A warehousekeeper accepts goods but does not see the certificate of registration within the Initial Period.
Time of deposit.
The warehousekeeper may immediately abandon the goods to the Commissioners (see Notice 197).
Goods are in a warehouse and owned by a revenue trader (other than the warehousekeeper) but there is no longer a registered owner or duty representative in respect of those goods.
Time when registration of owner or duty representative ceases.
Joint and several with the owner or duty representative.
The warehousekeeper may immediately abandon the goods to the Commissioners (see Notice 197).
An owner (this includes an authorised warehousekeeper) sells goods in warehouse. The new owner is a revenue trader but not registered with us.
Time of sale.
Joint and several with the seller and the buyer.
The warehousekeeper may immediately abandon the goods to the Commissioners and will no longer have joint and several duty liability (see Notice 197).
A registered consignor is a natural or legal person approved by HMRC who in the course of their business and under the conditions set by us, dispatches excise goods under excise duty-suspension arrangements upon their release to free circulation (meaning that all customs duties have been paid or accounted for).
When non-EU goods are imported into the EU via a UK port or airport they may only be moved in excise duty-suspension to allowable destinations when a registered consignor has started the movement via EMCS following release of the goods to free circulation.
We will only consider approving import agents and authorised warehousekeepers who receive the goods from the place of release to free circulation (for example a UK port, airport or inland clearance depot) as registered consignors. We have defined these persons as follows:
Either of these persons wishing to apply for approval should fully complete form EX72 (and form EXCISE 102 in the case of a partnership) and forward the completed form to the NRU. Please refer to paragraph 3.1 for detail on who should complete and sign the application form.
If we accept your application, we will issue you with a certificate of registration. The certificate will contain the following information:
You should quote the unique registration reference number on all correspondence with HMRC in connection with your approval. You should also have it available when contacting us.
If we do not accept your application, we will inform you in writing and give our reasons for the rejection. We will offer you a review of our decision or you can appeal direct to an independent tribunal (see section 11).
If you are approved you must also register for access to the Excise Movement and Control System (EMCS) within the online services offered by HMRC (see section 3.3.1) which will allow you to dispatch goods using this system.
All registered consignors must comply with the conditions and restrictions detailed in this notice. In addition, we may apply specific conditions which we will list on your certificate of registration.
Whilst we will only allow an import agent or the warehousekeeper of receipt to be a registered consignor the movement, from the place of release to free circulation to the warehouse, must be covered by a guarantee and this may be provided by either:
If you are one of the class of persons who may provide the movement guarantee for movements from the place of release to free circulation to the warehouse and do not currently have a guarantee please see Notice 197 Receipt into and removal from an excise warehouse of excise goods for details on how to apply for a movement guarantee.
We may cancel your approval at any time. If we do so, then we will inform you in writing and give our reasons for the cancellation. We will offer you a review of our decision or you can appeal direct to an independent tribunal (see section 11). When your approval is cancelled, you must immediately destroy your certificate of registration.
If you wish to cancel your approval you must write to the NRU at least 30 working days before the date on which you require us to act.
If we agree to cancel your approval, we will inform you in writing.
On the date of cancellation you must destroy your certificate of registration.
If the legal status of your business or company changes (for example, a sole proprietor becomes a partnership), the new legal entity must apply to become a registered consignor. We will not automatically approve the new applicant. In addition, if there is any change in the directors or key personnel of the company, HMRC retain the right to review the approval. Following this review, your approval may be withdrawn or have conditions added.
For any changes to the details contained on your certificate of registration (for example, change of address), you must advise the NRU in writing within seven days of the change taking effect. We will provide you with a new certificate within seven days of receipt.
You must destroy the previous certificate as soon as you receive the replacement certificate.
Providing that we have approved you to receive and store excise goods in bulk and we have not specifically restricted your approval by imposing any conditions or restrictions, you may carry out the following operations on your goods:
In addition, you may incorporate additives providing that you comply with EU and UK legislation (for example, the Alcoholic Liquor Duties Act 1979 (ALDA) in respect of additives to cider) and the quantity used does not affect the Tariff rating of the goods.
You can find more information about tariff classification in the Integrated Tariff of the United Kingdom.
The only allowable operations in distillers’ warehouses are:
While we do not class the transfer of spirits from one vat to another as an operation, you must record the details.
For goods already bottled, providing that we have approved you to receive and store bottled excise goods and not specifically restricted your approval by imposing conditions or restrictions, you may carry out the following operations:
We allow repacking of retail packs of tobacco products provided no disturbance of the tobacco product itself is involved. This means individual packets, tins or pouches of cigarettes or tobacco may be repacked into sleeves or cases but the packets, pouches or tins may not themselves be opened. It follows that cigarettes or hand-rolling tobacco may not be repacked into packets, pouches or tins bearing the fiscal mark. You will find more information about fiscal marks in Notice 476 Tobacco Products Duty.
If you wish to carry out an operation that is not listed above or if you are in any doubt that your action is an allowable operation, you must contact the Excise and Customs Helpline onTelephone: 0300 200 3700, giving full details of the proposed operation. The performing of this operation may require an amendment to your approval.
As an authorised excise warehousekeeper, you should treat imported excise goods the same way as EU produced excise goods. Importers must make sure that they correctly declare the volume and strength of the goods.
When carrying out any operation in an excise warehouse on duty-suspended goods, you must keep accurate records to allow us to carry out audit checks when we wish. Operators of Motor and Heating Fuel Warehouses should also refer to Notice 179 Motor & heating fuels: General information and accounting for Excise Duty & VAT.
You must take and record your accounts immediately before and after each operation, keep an accurate record of any cleaning agent used and advise HMRC about any gains and losses from any operation in warehouse.
You must also make sure that:
You may mix goods of different descriptions in one case if you make sure that your accounting system enables you to account accurately and satisfactorily for the goods concerned. In particular, you must use the correct tax type and duty rate for each of the products in the mixed case whenever you pay duty. You should contact HMRC if you have any doubts about the adequacy of your proposed system.
For all operations you must:
For each bottling operation you must:
Your production records of the strength of bottled excise goods and quantity, in each case, should agree with the strength and quantity shown on the bottle labels.
We may ask you to remove eligible remnants immediately to home use and pay the duty.
While we accept that there will be gains or losses from any operation carried out in warehouse, we do not set tolerances or ‘allowable losses’.
It is a warehousekeeper’s responsibility to maintain tight controls on all operations and to accurately record any resultant gains or losses.
Any gain resulting from the operation must be immediately added into the appropriate stock account. Any loss should be recorded and investigated. You will be required to demonstrate that any loss is within your business’s established parameters (taking into account the type of operation, product, machinery, temperature, and so on). If you fail to do this, or your explanation is not accepted by us we may ask you to account for the excise duty. Motor and Heating Fuel Warehouse operators should also read Notice 179 Motor & heating fuels: General information and accounting for Excise Duty and VAT.
We reserve the right to object to the use of labels, wrappers, cases or printed matter contained in cases bearing incorrect or misleading statements or words, for example:
If you print labels in a foreign language, you must provide an English translation on request.
We may require you to provide written clearance from a Trading Standards Officer for the use of any label.
The Food Labelling Regulations contain other requirements for labels on alcoholic drinks. Further information is available from your local Trading Standards Office or from the Food Standards Agency.
The contact details for the Food Standards Agency can be found at the end of this notice.
In order that the strength and volume of product may be determined for duty and stock control purposes, you must have a system in place that meets the following UK legal requirements:
Section 2 of ALDA
Spirits and all other products
Regulation 31 of the Excise Warehousing (Etc.) Regulations 1988 (EWER)
Spirits, wine and made-wine in bottles or containers
Regulations 18 and 19 of the Spirits Regulations 1991
Regulation 18 and Schedule 4 of the Beer Regulations 1993
You may use any recognised method to determine alcoholic strength provided that the results are accurate and the method is used consistently. The method used to settle any dispute will depend on the type of product, for example, for spirit the method used will be the hydrometer referred to in the Spirit Regulations.
You must record alcoholic strength and volume during an operation as accurately as possible, ensuring that you adjust for any obscuration caused by the presence of sweetening, colouring or other ingredients.
During an operation to bottle duty-suspended product in warehouse, you must give prior notice of the intended strength and quantity per case (for example 12 × 40% × 70 cl = 3.36 litres of alcohol), which should be reflected by the strength and quantity shown on bottle labels or other documents.
You should take and record sufficient measurements, during each operation morning and afternoon, of the liquid content and strength with:
Make sure that, if you use measuring container bottles (MCBs), the templates are calibrated at intervals of:
and are graduated for the temperature band in which the goods are filled (for spirits, the templates may measure the liquid quantity which, on adjustment for strength, gives the equivalent of 1 ml, 2 ml or 3 ml in litres of alcohol).
You must keep a sample of each bottle label used and any other document which specifies the quantity and strength of the goods.
Also, you must maintain and retain sufficient and indelible records of the measurements taken for six years, to show the trends in bottling performance and the action taken to make sure consistent accuracy in filling.
If the records kept for Trading Standards Officers are inadequate, too complex or provide only uncharted individual measurements, record our measurements on a chart. These are the minimum record requirements of HMRC.
Subject to the requirements set out above, you may adopt any of the accepted methods of measuring and recording set out in the ‘Code of Practical Guidance for Packers and Importers - Weights and Measures Act 1979’. This Department of Trade and Industry publication, known as the ‘Packers’ Code’, is available from The Stationery Office.
The Packers’ Code sets out the number of samples you should take for measurement of volume. You should take a similar number for measurement of strength. You must calculate average strength and volume for each separate operation. You must treat each change of container size or strength fill within an operation separately for the purpose of taking samples.
When recording strength, you should disregard figures beyond the first decimal place. For example, if the average strength resulting from an operation, or separate fills within it, is between 40.01% and 40.09%, record the strength as 40.0%.
You must be able to demonstrate that when measuring strength and volume you make a continuing genuine effort to achieve the strength and volume indicated on bottles or other containers. You should make adjustments, where possible during the operation, recording the actual strength found in the course of testing.
Normally, we will accept the labelled strength and volume as the basis of duty calculations if you can show that you are controlling operations so that:
We may ask you to pay any additional duty if we find that you have packaged goods at strengths or volumes exceeding those on the labels. Additionally, duty will be called for when:
You must write to tell us if you have underpaid duty following any operation as we will then advise you as to what you must do.
If you (the warehousekeeper) receive payment in cash for the provision of a service relating to duty-suspended alcohol products (that is, spirits and spirits-based beverages, beer, wine, made-wine, cider and perry) exceeding £9,000 (or equivalent in other currencies) you must complete form W7 Notification of cash payments for alcohol goods or alcohol related services in duty suspension, and send it by fax or email to the address on the W7.
It may be commercial practice for customers to pay cash in two or more instalments which individually are below the £9,000 notification threshold but the total sale will exceed this amount. In such circumstances you must notify us on form W7 when the first cash payment is received.
This form must be completed in accordance with the notes on the reverse.
For this requirement, an alcohol-related service refers to any service that a warehousekeeper may provide to a customer in relation to duty-suspended alcohol, for example:
Should you incur a liability covered by your premises guarantee, we will, in most cases, issue an assessment and, if appropriate, send a copy of the assessment to the principal to the guarantee.
We will only claim against the guarantee if you have failed to pay the assessment we have issued within 45 days. In general, we will make a claim against a guarantee when the principal to the guarantee has a liability to us for any irregularity resulting in the loss of duty in relation to excise goods stored in an excise approved warehouse.
If the guarantee covers both premises and movements we will still claim against the guarantee - claims will not be restricted to either premises or movements.
If we make a claim against the guarantee, we will ask the guarantor for payment. You should note that:
If, following the claim against the guarantee, the guarantor gives HMRC 30 days notice of withdrawal from the guarantee, we will require you to lodge a new premises guarantee with us. Unless you are able to provide a replacement guarantor we will cancel your authorisation and approval.
If we decide to lapse your guarantee we will give your guarantor 30 days notice of withdrawal. If we require you to lodge a premises guarantee with us, then, unless you are able to provide a replacement guarantor, we will cancel your warehouse premises authorisation and approval.
All excise warehousekeepers are required to submit a W1 return, normally on a monthly basis for each set of premises they operate. The only exception to this is for certain trade facility warehouses. Currently, export shop operators, operators of aircraft store floors and operators of Motor and Heating Fuels warehouses (except for those warehouses holding ethanol) also do not have to submit the W1 return. If this exception is removed an amendment to this notice will be made.
Returns must be received within 14 days of the end of each return period. If you fail to submit a W1 return on time this may result in the issue of a financial penalty. If you persistently fail to submit returns it could result in the withdrawal of your authorisation and approval.
You can submit the W1 return on a non-standard period basis but you must first agree these periods with the National Warehouse Return Centre (NWRC) prior to 1 March each year for the following financial year. Non-standard periods must be no longer than five weeks and returns must be submitted in accordance with that agreement.
The return is split into four sections:
Section A is the warehousekeeper’s declaration that the information you have provided is true and complete. This may be completed by either the proprietor, partner, or, if a limited company, a director or company secretary for that company or an authorised representative.
Section B is the stock return which shows alcohol and tobacco stock movements and stock on hand at the end of the return period.
Section C is for providing information on electronic administrative documents (eADs) as well as duty-suspended dispatches that take place under simplified arrangements and should include details of:
Section D is for providing changes to details of registered owners storing goods in the excise warehouse.
You should submit your W1 returns electronically either online or through the XML Direct Submission service available on the HMRC website. These electronic facilities require you to register and enrol for the Alcohol and Tobacco Warehousing Declarations (ATWD) service. To do this you will need to go to the Government Gateway website.
The benefits of using the online service include:
XML allows you to send the data directly from your computer system to HMRC, removing the need to complete a paper return or re-key the information. It will not allow HMRC to access or interrogate your computer system.
Until a formal announcement is made, you may continue to complete and submit paper W1 returns to the NWRC.
If you fail to submit a W1 return on time this may result in a financial penalty being issued. You can avoid financial penalties by ensuring that your returns are accurately completed and returned to the NRU or electronically submitted to the ATWD service by the due date. If you persistently fail to submit returns it could result in the withdrawal of your authorisation and approval.
The W1 return will be updated to cover reports of undischarged eADs under EMCS.
Due diligence is the appropriate reasonable care a company exercises when entering into business relations or contracts with other companies, and how it responds in a deliberate reflexive manner to trading risks identified.
Without effective safeguards in place, there are considerable risks to all businesses along alcohol supply chains of becoming implicated in illicit trading.
This condition requires that all excise registered businesses operating in the alcohol sector consider the risk of excise duty evasion as well as any commercial and other risks when they are trading. Doing so will help to drive illicit trading out of alcohol supply chains, and reduce the risk to businesses of financial liabilities associated with goods on which duty has been evaded.
From 1 November 2014 it becomes a condition of your approval as an excise warehousekeeper, registered owner, duty representative or registered consignor that you must:
(a) objectively assess the risks of alcohol duty fraud within the supply chains in which you operate,
(b) put in place reasonable and proportionate checks, in your day to day trading, to identify transactions that may lead to fraud or involve goods on which duty may have been evaded
(c) have procedures in place to take timely and effective mitigating action where a risk of fraud is identified
(d) document the checks you intend to carry out and have appropriate management governance in place to make sure that these are, and continue to be, carried out as intended
The fraud risks within a supply chain are unique to each business, and objective assessment of the likelihood of your trading activities contributing to fraud is an essential first step to developing effective due diligence procedures. You will need to consider the full range of trading relationships you have established and the potential for fraud in each.
The main risks within the alcohol sector include:
A key feature of the smuggling or diversion of alcohol to the UK market is the ability to source product either where the excise duty has been suspended or it has been refunded under drawback provisions. To assess your exposure to this risk you will need to objectively assess if there is potential for duty evasion resulting from your trading activity. You will need to know who you are selling to and where the goods are destined for and understand the market for these products. Without this, there is a risk of supplying goods directly or through a third party into illicit supply chains.
Import and warehousing procedures are often exploited to provide cover for the illicit movement of goods. Fraudsters will seek to distribute duty evaded goods as well as counterfeit alcohol into legitimate retail supply chains. To assess your exposure to this risk you will need to objectively consider whether the supply chain and trading activity is credible which includes knowing who you source goods from and provide a service to.
High level indicators of risk include goods being received from unusually complex or apparently uneconomic supply routes, for example, regular supplies of UK produced goods that have been shipped out to another Member State and then re-imported. If you are sourcing duty paid goods you will also need to consider the credibility of suppliers and the level of evidence you can obtain to demonstrate the provenance and duty status of goods.
Paragraph 10.5 of this notice provides further detail on risk indicators.
Once you have established the main risks of fraud you may be exposed to, your regular checks during trading should be of a type and level sufficient to establish the integrity of the excise transactions and supply chains you are trading in. This level needs to be reasonable and proportionate to the risk.
Depending on the nature of your business and complexity of your transactions, checks will need to be individually tailored. In particular, they must be sufficiently sensitive, yet robust enough, to pick up potential fraud risks. These checks should provide protection from the threat of fraud or you becoming inadvertently involved in fraudulent activity.
As a general rule “FITTED” checks should normally focus on:
Paragraph 10.6 of this notice provides more examples.
It is expected that your due diligence procedures will provide effective control over the risks of fraud within your supply chains. Where your checks indicated real concerns, we would normally expect aspects of your supply chain to be changed to address this, e.g. the supplier or the destination of the goods. However, a decision of whether or not to trade with another party remains a commercial decision for your business to take.
If your checks lead you to suspect duty fraud you should also inform our Customs Hotline. You can contact them by calling Telephone: 0800 595 000 or by completing our secure online form.
You can also notify them by post at:
HM Revenue and Customs
As part of our enforcement and general audit programmes, HMRC will consider whether or not the steps you have taken to embed anti-fraud due diligence into your trading activity are sufficient and timely to address fraud risks in your supply chains. We will aim to establish whether you have objectively assessed the risks in your supply chain, and you must be able to demonstrate that you have put in place reasonable and proportionate checks and effective procedures to respond to fraud risks when they arise.
If your due diligence procedures are considered insufficient to address fraud risks, we will carefully consider the facts of the case before taking further action, but where appropriate we will seek to support you to strengthen your procedures.
In more serious cases such as a failure to consider the risks, undertake due diligence checks or respond to clear indications of fraud, we will apply appropriate and proportionate sanctions. For serious non compliance, such as ignoring warnings or knowingly entering into high risk transactions, we may revoke excise approvals and licences.
You are also reminded that handling goods liable to excise duty held outside a duty suspension arrangement may cause you to become liable for any excise duty due on those goods and an excise wrongdoing penalty. Any of those goods you currently hold could also be liable to forfeiture.
You should be concerned about a prospective transaction where you identify one or more of the following indicators in both suppliers and customers, the presence of which may lead you to make further inquiries. Please note, this list is not exhaustive:
Financial health of the company you intend trading with
Identity of the business
Terms of contract, payment and credit agreements
The goods are to be received from an unusual source or supply route, for example, UK produced goods are sourced from another country and directly compete with those from a more direct supply route.
Existence or Provenance of goods
Terms of any contracts, payments and credit agreements
Existence or provenance
When we make a decision that you can appeal against, we will tell you and offer you a review. We will explain the decision and tell you what you need to do if you disagree.
For example with:
You will usually have three options. Within 30 days you can:
A review will be handled by a different officer from the one who made the decision. If you prefer to have an independent tribunal hear your case, you must write directly to the Tribunals Service.
If you want us to review a decision, you must write to the person who issued the decision letter, within 30 days of the date of that letter.
We will complete our review within 45 days, unless we agree another time with you.
If you have asked for a review you cannot ask the tribunal to hear your case until the 45 days (or the time we agreed with you) has expired, or we have told you the outcome of the review.
If you are not satisfied with the review’s conclusion, you have 30 days within which to ask the tribunal to hear your case.
If we cannot complete our review within 45 days, or any time we agreed with you, we will ask you whether you are willing to agree to an extension so that we can complete the review. If you do not agree to an extension, the review is treated as concluding that the decision being reviewed is upheld.
We will write and tell you this; you then have 30 days from the date of that letter to ask the tribunal to hear your case. Your request should set out clearly the full details of your case, the reasons why you disagree with us and provide any supporting documentation. You should also state what result you expect from our review.
If you do not want a review you may appeal to the independent tribunal. You need to send your appeal to the Tribunals Service within 30 days of the date on the decision letter.
You can find further information about reviews and appeals in factsheet HMRC1 HMRC Decisions - What to do if you disagree. You can get this factsheet by:
You can also find more information about how to appeal on the Tribunals Service website or by phoning Telephone: 0845 223 8080.
All HMRC notices are available to download from our website, go to www.hmrc.gov.uk.
You will find the primary legal provisions applicable to the contents of this Notice in:
Alcoholic Liquor Duties Act 1979
Customs and Excise Management Act 1979
Hydrocarbon Oil Duties Act 1979
Rehabilitation of Offenders Act 1974
Tobacco Products Duty Act 1979
Value Added Tax Act 1994
You will find detailed requirements in:
The Beer Regulations 1993 (SI 1993/1228)
The Beer Regs
The Channel Tunnel (Alcoholic Liquor and Tobacco Products) Order 2003 (SI 2003/2758)
The Cider and Perry Regulations 1989 (SI 1989/1355)
The Denatured Alcohol Regulations 2005 (SI 2005/1524)
The Excise Duties (Deferred Payment) Regulations 1992 (SI 1992/3152)
The Excise Duties (Goods Imported for Testing, etc) Relief Order 1991 (SI 1991/2089)
Testing Relief Order
The Excise Goods (Drawback) Regulations 1995 (SI 1995/1046)
The Excise Goods (Holding, Movement and Duty Point) Regulations 2010 (SI 2010/593)
The Excise Warehousing (Etc.) Regulations 1988 (SI 1988/809)
The Hydrocarbon Oil Regulations 1973 (SI 1973/1311)
The Revenue Traders (Accounts and Records) Regulations 1992 (SI 1992/3150)
The Spirits (Rectifying, Compounding and Drawback) Regulations 1988 (SI 1988/1760)
The Spirits Regulations 1991 (SI 1991/2564)
The Spirits Regs
The Value Added Tax Regulations 1995 (SI 1995/2518)
The Warehousekeepers and Owners of Warehoused Goods Regulations 1999 (SI 1999/1278)
The Wine and Made-Wine Regulations 1989 (SI 1989/1356)
You will find the conditions which cover the warehousing of excisable goods in Council Directive 2008/118/EC OJ: L9, 14.01.09.
Alcoholic Liquor Duties Act 1979.
An authorised and registered occupier of an excise warehouse, in accordance with Regulation 3 of the Warehousekeepers and Owners of Warehoused Goods Regulations 1999.
Customs and Excise Management Act 1979.
Customs Handling Import and Export Freight. HMRC’s computerised system for processing import and export declarations
The Commissioners for HM Revenue & Customs.
A place approved by HMRC for the holding of goods on which customs duty and import VAT is suspended.
A place approved by HMRC for the holding of spirits immediately following production in the associated distillery.
A person authorised and registered by HMRC to act as an agent for non-UK owners of excise goods who wish to deposit goods in a UK excise warehouse.
The European Union. You will find a list of the current Member States in the Tariff Volume 1 Part 2.
For the purposes of this notice, an indirect tax on certain goods; for example, beer, wine, made-wine, cider, perry, spirits, mineral oil, cigarettes and other tobacco products. Both UK and EU produced and imported goods are subject to Excise Duty.
A place approved by HMRC for the holding of goods on which excise duty and VAT is suspended.
Once import procedures have been completed and any customs duties or similar charges have been paid in an EU Member State, goods from non-EU countries are said to be in ‘free circulation’ within the EU.
The Financial Securities Centre.
In the context of this notice, an undertaking given by the guarantor to pay us a sum of money up to the level of the guarantee when we request such a payment. The wording of the guarantee has been agreed by financial institutions and us and includes an automatic restitution facility.
In the context of this notice, the person who undertakes to pay to us a sum of money up to the level of a guarantee; for example, a bank or a building society.
In the context of this notice, any owner or other person possessing or having a beneficial interest in the goods between the time of importation and when they are released to free circulation.
In the context of this notice, a period of 72 hours, commencing from the time when goods are first deposited in an excise warehouse (excluding Saturday, Sunday, Christmas Day, Boxing Day, New Year's Day, Good Friday and Easter Monday).
Countries which are not members of the European Union.
The National Registration Unit.
The extent to which a hydrometer reading of the strength of spirits is reduced by the presence of sweetening, colouring or other matter.
Other Member State of the European Union.
Any bundle, case, carton, cask or other container.
In the context of this notice, the person who arranges for a guarantee and uses it to provide financial security.
A person approved and registered by a Member State's authorities to dispatch excise goods in excise duty-suspension following their release to free circulation.
A person who has been authorised and registered by HMRC to deposit their duty-suspended goods in an excise warehouse.
In the context of this notice, anyone carrying on a trade or business concerned with the buying, selling, importation, exportation, dealing in, or handling of excise goods, and the financing or facilitation of any such transactions or activities. You will find a full definition in CEMA section 1.
Integrated Tariff of the United Kingdom.
An EU term for premises approved under the legislation of the Member State in which the premises are located for the:
of excise goods under duty-suspension arrangements. All excise warehouses are tax warehouses.
The quantity of goods passing through a warehouse.
These products include:
The person carrying out the first transportation of excise goods in a duty-suspended movement.
Unit of account
The type or size of packing in which the goods are sold; for example, packets of 20 cigarettes.
In the majority of cases, you should be able to find the information you need on our website at www.hmrc.gov.uk. If you cannot find the answer there, your first point of contact should be the Helpline on Telephone: 0300 200 3700.
If you have a problem with the EMCS registration and enrolment process, you should contact the EMCS Online Services Helpdesk on Telephone: 0300 200 3701.
HMRC National Registration Unit (NRU)
21 India Street
Phone: 03000 516229
Fax: 03000 516249
HMRC National Warrant Processing Unit (NWPU)/National Warehouse Return Centre (NWRC)
2nd Floor Portcullis House
13-21 India Street
Phone: 03000 576790
Fax: 03000 516249
HMRC National Verification Centre (NVC)
7 Cochrane Street
Phone: 03000 576109
HMRC Financial Securities Centre (FSC)
21 India Street
Phone: 03000 516227
Fax: 03000 516249
Food Standards Agency
1st Floor Aviation House
Phone: 020 7276 8147
Your Charter explains what you can expect from us and what we expect from you. For more information, go to www.gov.uk/hmrc/your-charter
If you have any comments or suggestions to make about this notice, please write to:
HM Revenue and Customs
Excise Holding and Movement Team
3rd Floor West
3 Stanley Street
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