|HMRC Reference:Notice 202 (May 2010)||View Change History|
This notice cancels and replaces Notice 202 (December 2002) and Update 1 (December 2002) and Update 2 (January 2007).
This notice gives registered mobile operators guidance on:
This notice does not detail the procedures for selling duty-free goods for takeaway on journeys to a destination outside the EU (this includes outside the UK). Any sales made on these journeys fall outside the Registered Mobile Operator Scheme.
A full list of EU member countries can be found in the Integrated Tariff Volume 1 Part 2. The main legal provisions are:
Someone registered in the UK to ship, import or sell merchandise by retail to passengers on board a ship or aircraft travelling between two EU Member States. (SOBSA, Regulations 3(1), (2) and 6(1) refer.) The customs’ administrations in the other Member States may also have a requirement for a RMO to be registered under their legislation.
If you do not have a place of business in the UK you will need to appoint a fiscal representative who meets all the requirements. (SOBSA, Regulations 9(1) and (2)).
A fiscal representative (FR) is a registered excise dealer and shipper approved by us to act on behalf of a registered mobile operator (SOBSA, Regulations 4(1)-(3)). The FR must account for the duty and VAT due from the registered mobile operator. Even if you are acting as an agent for an owner of the goods, as seller of the merchandise, you must still be a registered mobile operator. For example, an airline selling goods on a commission basis, where the supplying warehouse retains ownership of the goods until the sale is made.
When you are operating a:
You do not need to register as an RMO. (SOBSA Regulations 6(2) and (3)).
A procedure that allows merchandise to be sold at all times during a journey between Member States. The excise goods must be loaded already released for consumption in the Member State of departure with the Member State of destinations duty being accounted for on entry into that State's territorial sea or airspace. You will find more information on the standard procedure in section 4.
A procedure whereby HMRC will allow excise goods already released for consumption in one Member State to transit the territory of the UK provided that the goods are not held for a commercial purpose within UK territory. You will find more details in section 5.
Excise goods already released for consumption, intended for retail sale to passengers for takeaway, on board a ship or aircraft making an intra-EU journey.
Stores are any goods (duty-free, duty-paid or 'innocent' goods) loaded onto a ship or aircraft for use during the journey:
However for the purpose of this notice when we refer to stores we mean duty-free or duty-paid excise goods.
As part of your RMO's registration, you must keep records and accounts which detail all your transactions on a daily basis.
It is a procedure to reclaim UK Excise Duty specifically designed for a RMO operating the standard procedure:
You should be aware that it is a different procedure from the standard drawback system as set out in Notice 207 Excise duty: Drawback.
It is a pre-printed form. All RMOs must submit the return by the due date. Nil returns are required only when the standard system is used.
It is a payment system that gives you a period of credit before you have to pay any Excise Duty due. It allows you to pay on a fixed day after the end of the accounting period in which the Excise Duty becomes due.
You need our approval to defer Excise Duty. Notice 101 Deferring duty, VAT and other charges explains how to apply and gives general information on deferring all duties and VAT.
We can seize your goods if you do not fully comply with all your responsibilities. We may also assess duty or impose civil penalties for certain cases. Any non-compliance may attract liabilities in other Member States (SOBSA Regulation 26).
You should not assume that we will agree to register you. In particular, you should not enter into any binding financial agreements which assume that you will be registered as a mobile operator.
We will not consider your application unless you meet all of the following conditions:
To apply to be registered you should obtain form REDS 1 from the Duty free unit of expertise. The address can be found at the end of this Notice.
Before completing the application form you will need to decide if you are trading as:
You should read this notice and the notes on the reverse of form REDS 1 before you complete the application form.
If you need any further guidance you should contact the Excise Helpline.
If your turnover is below the VAT registration threshold, you should apply for voluntary VAT registration. You will find more information in Notice 700 The VAT Guide. You should contact the Excise Helpline for further details.
Individual corporate bodies within a VAT group may apply for separate registration as an RMO as long as they quote the VAT group registration number and their reference number.
You can apply at any time once you have decided that you wish to trade as a Registered Mobile Operator. However, you should give us as much notice as possible so that your application can be considered with a view to your anticipated start date.
If you provide false or misleading information on your application form, then we may do one or all of the following:
When you apply you must tell us if you have an unspent conviction under the Rehabilitation of Offenders Act, (other than minor motoring offences) or you have accepted a compounded settlement during the preceding three years. We may refuse to approve you. In particular, we will not approve anyone who (at the time of applying) has an ‘unspent’ conviction under the Rehabilitation of Offenders Act, (other than minor motoring offences) or has accepted a compounded settlement during the preceding three years.
If we turn down your application, we will inform you in writing and give our reasons for the rejection.
If we accept your application, we will send you a certificate of registration (SOBSA Regulation 5 (1) and (6)), showing the following information:
On receipt, please ensure that all the details are correct. If you find any errors please contact the Excise Helpline. You should quote your registration number on any correspondence which you have with us about your RMO activities. You should also have it available when you contact us. You should keep it and make it available to our officers if asked.
If any details on your registration certificate change, you must write to us within seven days of the change, giving all the new details. Once we have processed the changes we will send you a new certificate. Make sure you destroy the old certificate when you receive the new one (SOBSA Regulation 5 (3)-(5)).
A registration can be cancelled either because you ask us to, or because we think it necessary. If we are given sufficient cause, we can cancel or vary the terms of your registration at any time.
If HMRC cancels your registration, we will inform you in writing and give our reasons. You must destroy your certificate of registration immediately after you receive our letter.
If you wish to cancel your registration you must:
You will remain liable to pay any duty due in connection with your earlier activities.
You cease to be a registered mobile operator from the date we inform you of the cancellation of your registration.
If the status of your business or the company changes, for example a sole proprietor becomes a partnership, then the new legal entity must apply to become an RMO.
You should not assume that we will automatically register the new applicant.
If you want to vary your activities, you should write to us giving details. This should be done at least 10 working days before the start of the accounting period in which you wish us to vary your activities.
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.
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.
More information on reviews and appeals is available in factsheet HMRC1 HMRC decisions – what to do if you disagree or you can phone the HM Revenue & Customs Orderline on 0845 900 0404.
You can also view our internet guide Appeals against HM Revenue & Customs decisions.
You can find information on the tribunal on the Tribunals Service website or by phoning them on 0845 223 8080.
A registered mobile operator may choose to use either the standard procedure, or the 'closed shop' option (see section 5). However, there are some circumstances where only the standard procedure may be used. This is when you wish to hold or sell excise goods whilst in UK territory.
At the present time, HMRC is unaware of any RMO opting to use the standard procedure at the time of publication. If any RMO wishes to use the standard procedure they should contact the Duty-Free Unit of Expertise at the address at the end of this notice for details of the accounting and administrative procedures to be used.
Article 33 of Directive 08/118 states that where excise goods already released for consumption in one Member State are held for a commercial purpose in the territory of another Member State, the Excise Duty shall be levied in the Member State in which those products are so held.
If merchandise is loaded onto a ship or aircraft already released for consumption in one Member State and returning to the same Member State via the territory of the United Kingdom and the goods are not held for a commercial purpose within United Kingdom territory, then the goods are not liable to UK Excise Duty. Whilst the goods are within UK territory we deem them to be 'in-transit'.
HMRC calls this the closed shop option. Please see the Excise Goods (Sales on Board Ships and Aircraft Regulations 1999 (as amended) Part 6A.
If any merchandise is held for a commercial purpose whilst in UK territory then these goods are liable to UK Excise Duty. This duty must be paid immediately.
For the purpose of the closed shop option, commercial purpose means the offering for sale, whether or not any sale is made whilst within UK territory.
If you wish to use the closed shop option whilst in UK territory, under the provisions set out in the Excise Goods (Sales on Board Ships and Aircraft) Regulations 1999 (as amended by the Excise Goods (Sales on Board Ships and Aircraft) (Amendment) Regulations 2010) Part 6A you must advise HMRC of your intended procedures and obtain their approval before you start using the closed shop procedure. You should also be aware that the systems and procedures in respect of any accompanying documentation as required by the fiscal authorities in the Member State of departure must be followed. These documents and procedures may only be varied if the UK has been approached by the fiscal authorities in another Member State and has agreed, by means of a bilateral agreement, to simplify the documentation needed to accompany the goods during the journey.
HMRC will publish a list of any agreements made where simplified documentation may be used.
UK territory starts and ends 12 miles from the UK landmass or where the distance between the UK and another Member State is less than 24 miles, a point equidistant between the two Member States. However HMRC accepts that it is impossible for RMOs operating the standard system to change stock to that released for consumption in the Member State of arrival immediately and for operators using the closed shop option to remove all customers from the shop when they may have in their possession goods chosen but not paid for at the 12 mile limit.
We may therefore accept a fixed time-base to determine when a ship or aircraft enters and leaves UK territory. You should apply for a fixed time agreement for entering or leaving UK territory and ensure that it is confirmed in writing. You will need this information when operating the standard or closed shop procedures. The fixed time agreement must be strictly adhered to.
We accept that an aircraft will enter or exit UK airspace 20 minutes before wheels down or after take-off.
For ships, on application, we will give you a fixed time to determine that the ship has left UK territory. This will be based on the vessel used, and the route taken from and to each port. You should send your request to the Duty-free Unit of Expertise (UE) with suitable information to justify your application.
The UE will send you your fixed time for that vessel on that route.
If you wish to use an alternative method rather than the fixed time-base, you must write to our Excise Helpline enclosing your proposals. You must satisfy us that your alternative system is fully auditable, before we will give our approval.
Whether you use a fixed time or alternative method you must ensure that no transactions take place within UK territory, as deemed by the agreed method. Failure to do so will cause all excise merchandise to become liable to duty under the default, standard procedure. This is because the goods will be held for commercial purpose in the UK and are, therefore, no longer in transit.
Non-excise goods can be sold from the shop for the entire journey provided that it is not possible for anyone to handle excise goods whilst in UK territory. Any method used to achieve this – shutters or partial closure of the shop are two examples – should prevent excise goods from being taken from the shop shelf.
Under the terms of Council Directive 08/118/EEC Article 41, until the European Council acting unanimously on a proposal from the Commission has adopted Community provisions on stores for ships and aircraft, the UK may maintain its national provisions on the subject.
The UK’s legal provisions regarding stores are contained in the Customs and Excise Management Act 1979 sections 39 and 61, the Aircraft (Customs and Excise) Regulations 1981 and the Ship’s Report, Importation by Sea Regulations 1981.
Excise goods for consumption on board may be either duty-free or duty-paid at the time of loading. Duty-free stores may be loaded and used for consumption on board journeys going outside the UK. Any journeys within the UK can only use UK duty-paid goods as stores, and new stores must be loaded duty-paid. HMRC defines a journey as starting once passengers begin boarding the ship or aircraft.
You will find further details on the procedures for loading and re-landing stores in Notice 69a Duty-free ships' stores and Notice 198 Duty-free aircraft stores.
Stores may only be sold or given away as complimentary goods if the goods are actually consumed during the journey.
You can only sell or provide stores for consumption on board, whether duty-free or duty-paid, through a bar, restaurant or café that provides table and chairs.
Within UK territory, the following limits are applicable to excise goods sold for on board consumption. These are the maximum quantities that may be sold duty-free to individual passengers (aged 17 and over) per leg of the journey:
one packet of 20, or
one packet of 10 or less (not exceeding 30 grams), or
one packet of five or less (not exceeding 25 grams), or
one packet (not exceeding 25 grams), or
one packet (not exceeding 25 grams).
by the glass/miniature bottle
by the glass/opened bottle/miniature bottle
Beer and cider:
by the glass/opened bottle or can.
Spirits may be supplied only as poured drinks or in miniature bottles.
Wine may be sold in full bottles, half bottles or quarter bottles. Full bottles and half bottles must be opened (for example, uncorked) before being handed over to the customer for consumption in a ferry bar, restaurant or cafe.
Sales cannot be made from vending machines as these sales do not meet either the UK or other Member State's control requirements, even if sited within the approved areas (bars, restaurants or cafes).
Passengers may not re-land any alcohol products that they have purchased for consumption on board. For tobacco goods, HMRC accepts that one opened packet of tobacco products may be re-landed.
If any ferry operator or RMO is found to supply stores in excess of the quantities stated above HMRC may, under the powers granted to them under section 61 of the Customs and Excise Management Act 1979, limit or refuse to allow the loading of any new stores at a UK port and may require a full stores declaration to be made on arrival at the UK port.
You cannot load tobacco products for consumption on board an aircraft where a no smoking policy applies. Sales of all other products will be by service at the seat. The bottles must be opened before handing to the passenger.
If you fail to comply with our conditions relating to excise goods consumed during any journey with a destination outside the UK, or for duty-free goods sold for takeaway during journeys with a destination outside the EU, we may restrict the amount of excise goods that can be loaded for this purpose. The power to take this action is contained in the Customs and Excise Management Act 1979 section 61.
Excise goods in duty-suspension are not included within the Registered Mobile Operator Scheme. Notice 197 Excise goods: Receipt into and Removal from an excise warehouse of excise goods gives details on how duty-suspended excise goods may be removed from UK warehouses.
Excise goods must be released for consumption before they can be held for sale as merchandise during an intra EU journey.
The goods supplied from a UK warehouse must first arrive at the approved tax warehouse or registered trader shown on the accompanying documentation or on the eAD in the Member State of destination. The relevant procedure as required in the Member State of arrival must be followed to discharge the movement. The Excise Duty in the Member State of receipt must be paid according to the procedures laid down by that Member State in order to release the goods for consumption.
Once the goods are released for consumption, you can add the goods to your stock of merchandise for retail sale.
The UK considers such voyages qualify as duty-free voyages if, and only if, all passengers have the opportunity to disembark and make an economic purchase in the territory outside the EU. Goods (merchandise and consumption on board) may be loaded duty-free. Goods for consumption on board may be supplied when passengers begin embarkation. The on-board shops may begin selling stores when the ship has cast off.
However, you should advise all passengers that for any goods purchased for takeaway, the quantitative restrictions for passengers returning from destinations outside the EU, as detailed in Notice 1 Travelling to the UK, will apply.
If passengers do not have the opportunity to disembark and make a purchase whilst the vessel is in the port situated in the third country, then HMRC does not consider the voyage to qualify to sell duty-free goods for takeaway and either the standard or closed shop procedures must be used.
The UK considers such voyages qualify as duty-free voyages. All goods (merchandise and consumption on board) may be loaded duty-free. Goods for consumption on board may be supplied when passengers begin embarkation. The on-board shops may begin selling stores when the ship has cast off or the aircraft is airborne.
Again, you should advise all passengers that for any goods purchased for takeaway, the quantitative restrictions for passengers returning from destinations outside the EU, as detailed in Notice 1 Travelling to the UK, will apply.
HMRC considers a ferry is a means of transport between points A and B, and a cruise is a recreational excursion on board a ship that may include visits to a number of destinations.
There are three classifications of cruise:
If the cruise ship (and therefore all the excise goods remaining on board) is undertaking a different classification of cruise for its next journey, the excise goods remaining must change their duty status before departure. Any new excise goods will be loaded UK duty-paid or duty-free as dictated by the status of the cruise.
On arrival in the UK from a non-EU cruise, you should advise your passengers to pass through the UK Customs’ Red and Green Channels. They are restricted to the normal duty-free travellers’ allowances listed in Notice 1.
Where a cruise starts in a country outside the UK but as a part of its itinerary calls at consecutive UK ports before ending the cruise outside the UK, the consumption of stores may continue whilst the vessel is undertaking the intra-UK leg of the journey provided that no passengers can board at the first UK port and only undertake the intra-UK leg of the cruise.
Providing the RMO has opted to use the closed shop option we will treat goods as being ‘in transit’ and therefore the application of any duty stamps (alcohol) or fiscal marks (tobacco products) is not applicable.
If you wish to sell excise goods at all times during the journey (standard procedure – see section 4), you should contact the Duty-Free Unit of Expertise for details of your obligations relating to tax stamps. See section 17.
The excise duty point for merchandise when operating the standard system is:
Where the Excise Duty on goods has not been paid or deferred, the excise duty point will be the time of loading (SOBSA Regulation 18(1)).
Where goods brought by sea or air remain unsold on entry into the UK’s territory, the excise duty point will be the time of entry (SOBSA Regulation 18(2)).
The owner, or the registered mobile operator who imported the merchandise, is liable to pay any Excise Duty due at the excise duty point. Any other person involved in the goods reaching an excise duty point will also be jointly and severally liable with the owner or registered mobile operator. (SOBSA Regulation 18(3)).
The excise duty point for merchandise when operating the closed shop option and the merchandise is held for a commercial purpose in the UK is Regulation 18 of SOBSA.
Duty-free stores become liable to UK Excise Duty when they are supplied other than for the purpose intended, (for example, they are sold as merchandise on an intra-EU journey). (SOBSA Regulation 19(1)).
The person liable to pay the duty at the excise duty point is:
(SOBSA Regulation 19(2) and (3)).
You must keep all accounts covering transactions as a registered mobile operator or fiscal representative. In addition, keep all commercial records required by Notice 206 Revenue traders' records.
You should keep and preserve all records for three years. If this is difficult for you, phone the Excise Helpline on 0845 010 9000. We can often authorise a shorter retention period for secondary records. We may also allow you to store your records and accounts in alternative forms, for example microfiche.
For further information see Notice 206 Revenue traders' records.
VAT is due at the Member State of departure’s tax rate for the whole journey.
Providing all destinations are within the EU, the VAT rate will always be that of the country of departure.
If a journey includes both EU and non-EU countries, the following applies:
If you operate journeys to other Member States and intend to sell goods by retail to passengers on board your ships or aircraft for takeaway you must register for VAT in each Member State. You may be liable to pay VAT to each country you visit. You will need to check with each Member State's authorities for this information.
For the purpose of buying merchandise for takeaway at the end of any voyage between EU Member States, crew are treated the same way as passengers.
Crew working on board ships and aircraft may be issued with stores for consumption on board. Notice 69a Duty-free ships' stores gives details of the systems and procedures to be followed.
HMRC Duty-Free Unit of Expertise
Phone: 01227 864862
This sets out the rules governing the movement of products subject to Excise Duty already released for consumption in one Member State and being held for a commercial purpose in another Member State.
The Customs and Excise Management Act 1979
The VAT Act 1994
The Excise Duties (Deferred Payment) Regulations 1992 (SI No.1992/3152)
The Excise Duties (Personal Reliefs) (Amendment) Order 1999 (SI No.1999/1617)
The Excise Goods (Drawback) Regulations 1995 (SI No.1995/1046)
The Excise Goods (Holding, Movement, Warehousing and REDS) Regulations 1992 (SI No.1992/3135)
The Excise Goods (Sales on Board Ships and Aircraft) Regulations 1999 (SI No.1999/1565)
The Excise Warehousing (etc.) Regulations 1988 (SI No.1988/809)
The Revenue Traders (Accounts and Records) Regulations 1992 (SI No.1992/3150)
The Value Added Tax (Abolition of Zero-Rating for Tax-Free Shops) Order 1999 (SI 1999/1642)
The Value Added Tax Regulations 1995 (SI No.1995/2518)
Warehousekeepers and Owners of Warehoused Goods Regulations 1999 (SI No.1999/1278)
HM Revenue & Customs is a Data Controller under the Data Protection Act 1998. We hold information for the purposes specified in our notification to the Information Commissioner, including the assessment and collection of tax and duties, the payment of benefits and the prevention and detection of crime, and may use this information for any of them.
We may get information about you from others, or we may give information to them. If we do, it will only be as the law permits to:
We may check information we receive about you with what is already in our records. This can include information provided by you, as well as by others, such as other government departments or agencies and overseas tax and customs authorities. We will not give information to anyone outside HM Revenue & Customs unless the law permits us to do so. For more information go to www.hmrc.gov.uk and look for Data Protection Act within the Search facility.
Administrative Accompanying Document for movement under duty-suspension arrangements of products subject to Excise Duty specified in Commission Regulation (EEC) No. 2719/92.
The Customs and Excise Management Act 1979.
Consumption on board
Any goods sold or supplied to passengers on board a ship or aircraft, for immediate consumption during the journey.
A system that allows excise goods to be stored or moved without payment of duty to which the goods are liable.
Goods liable to Excise Duty.
Excise goods carried on a ship or aircraft entering into the UK’s territory.
A journey between two different EU Member States.
Each of the countries making up the European Union.
Excise goods already released for consumption intended for retail sale to passengers on board a ship or aircraft making an intra-EU journey.
Registered Excise Dealer and Shipper.
Registered mobile operator
Someone who has been approved and registered by the Commissioners to ship, import or sell merchandise to entitled travellers on board a ship or aircraft.
Released for consumption
Goods that have had all relevant taxes paid on them so that they can legitimately be purchased and/or consumed within the Member State where they are held for commercial purposes.
Excise goods on which the duty has been paid in another member State (excluding mineral oils).
Relevant revenue trader
A registered mobile operator or fiscal representative.
Retail schemes are methods for arriving at the value of taxable retail supplies and determining what proportion of those sales are taxable at the different rates of VAT.
In the context of this notice, anyone carrying on a trade or business concerned with the buying, selling, importation, exportation, dealing in, handling, financing or facilitation of excise goods.
Simplified Administrative Accompanying Document for intra-Community movement of products subject to Excise Duty which have been released for consumption in the Member State of dispatch specified in Commission Regulation (EEC) No. 3649/92.
Excise goods loaded onto a ship or aircraft, which intends to travel to a country of destination outside the UK.
Stores are any goods used for consumption on board a ship or aircraft making a journey to a destination outside the UK, or can be sold by retail to passengers making a non-community journey.
Goods sold by retail and taken away by passengers when they disembark.
This refers to a Member State’s territorial sea or airspace (within a 12 mile limit).
Go to www.hmrc.gov.uk
Phone 0845 010 9000 Monday to Friday 8.00 am to 8.00 pm.
Os hoffech siarad â rhywun yn Gymraeg, ffoniwch 0845 010 0300,
Llun i Gwener 8.00 am i 6.00 pm.
If you are hard of hearing or speech impaired and use a Textphone,
phone 0845 000 0200.
If you are not satisfied with our service, please let the person dealing with your affairs know what is wrong. We will work as quickly as possible to put things right and settle your complaint. If you are still unhappy, ask for your complaint to be referred to the Complaints Manager.
For more information about our complaints procedures go to www.hmrc.gov.uk and under ‘quick links’ select ‘Complaints’.
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