Research and analysis

Executive Summary: Identifying the impact of EU Exit on current UK Excise Movement and Control System (EMCS) users 2018

Published 15 July 2025

This report was commissioned under the Conservative administration (2010 to 2024), and conducted in 2018.

HM Revenue and Customs (HMRC) Research Report 823

1. Background 

HM Revenue and Customs (HMRC) commissioned IFF Research to undertake research on the impact of EU Exit on the use of the Excise Movement and Control System (EMCS) users. 

Under European Union (EU) Legislation, duty-suspended excise goods move within the EU without payment of excise duty, so that duty is paid only in the country of consumption. The Excise Movement and Control System (EMCS) provides EU Member States with an electronic system of monitoring the movement of duty suspended goods to ensure the duties are properly levied at their final destination. 

Depending on the customs arrangement reached after the United Kingdom (UK) leaves the EU, excise goods imported from or exported to the EU may need to be treated as if they were imported from or exported to a non-EU country. The UK would continue to use EMCS to control intra-UK movements, but changes to EMCS may be required. This could impact on how the HMRC system currently works and how businesses, agents and software houses interface with the system. 

2. Research Objectives 

Considering the UK’s planned exit from the EU, HMRC commissioned IFF Research to undertake primary research to help HMRC better understand how UK EMCS users currently interact with the system and how this could be impacted by EU Exit. 

3. Methodology 

This report summarises key findings from 2 strands of research: 

• a quantitative telephone survey conducted in October 2018 with 269 individuals in charge of excise activities of businesses currently using EMCS
• a qualitative ‘follow-up’ phase consisting of 50 in-depth telephone discussions with respondents from the main survey conducted in October and November 2018 

4. Key findings 

4.1 How do businesses currently interface with EMCS? 

Businesses tended to deal with EMCS internally: the clear majority (93%) of those that participated in the quantitative survey said this was the case, whereas 7% nominated an agent or third-party to use the system on their behalf. 

Businesses generally felt that EMCS was easy to use and that it required little or no formal training. This, combined with the fact that businesses’ perceived EMCS to comprise a small aspect of their business activity, meant that many did not engage an agent or third-party to deal with the system on their behalf. 

Three-quarters (73%) of businesses that participated in the quantitative survey made EMCS submissions via the HMRC EMCS Portal only, 16% only made submissions via third-party software and 9% did so via both. 

Use of third-party software was far more common among large businesses (those with 250+ employees). Half (50%) of large businesses reported using third-party software, whereas this was the case for 18% of those with fewer than 250 employees. Large businesses had a higher number of transactions and found it more efficient to use third-party software which automated parts of the process of using EMCS. 

Users of third-party software preferred the integration with their other software and additional functionality that was not available via the HMRC EMCS Portal. Some also suggested that the quality of support available via their third-party provider was better than that available via HMRC. Non-users of third-party software perceived there to be no benefit in doing so or felt that the potential costs of buying-in that additional functionality outweighed benefits. These businesses tended to use EMCS less frequently so the administrative burden of doing so was not as great. Some felt dealing with the whole process themselves afforded them more control and visibility over the system. 

Businesses generally felt that EMCS worked adequately, though some felt it was unwieldy and could be made more user-friendly. Businesses generally suggested their use of EMCS was a means to an end. Ultimately, they used it to ensure that they could move goods in duty suspension. They considered this to be far more important than their use of the EMCS system itself. For many businesses this comprised a small aspect of their business activity. 

4.2 How will businesses’ use of EMCS be impacted after the UK has left the EU? 

At the time of the research, the customs rules that will apply to excise goods moved to and from the EU, after the UK has left the EU, were not publicly known and findings from the research reflected this. A minority (28%) of businesses felt they understood the customs rules that will apply to excise goods moved to and from the EU after the UK has left the EU. This meant the majority of businesses found it difficult to comment on how their future use of EMCS would change with any certainty. 

Some businesses that participated in the qualitative research thought their use of EMCS would be confined to intra-UK movements only after the UK has left the EU. These businesses felt this would mean they would continue to use EMCS in a similar way. Although they acknowledged they would not be able to send goods directly to customers in EU countries and that their customers in EU countries would not be able to send their goods directly to them using EMCS, if future trade with the EU is subject to the current UK-RoW (rest of the world) trade rules. 

Some businesses felt these changes would mean their use of EMCS would effectively stay the same, whilst others felt it would result in them making more EMCS movements. 

Businesses were generally more concerned about changes to customs processes and systems, and how they might impact on their future use of EMCS (rather than being concerned about actual changes to EMCS itself). 

Some businesses were concerned about the potential impacts of needing to complete customs declarations for goods being traded with EU countries in the future (as they currently do with RoW countries). They suggested this could create issues due to increased administrative burden, costs and time that goods spend at the border. Businesses were more concerned about how these changes could impact on their business activity and use of EMCS by extension, than they were about changes to EMCS itself impacting on their business activity. 

Businesses were less likely to comment on how changes to EMCS could impact on them from a legal perspective, which could reflect a lack of knowledge in this area. Few suggested they would need to obtain additional customs authorisations, simplifications or procedures to continue to trade with the EU after the UK has left. 

Few businesses felt they had been able to adequately prepare for how their use of EMCS may change. Although some knew what they might do in certain scenarios (depending on what type of customs arrangement is reached); they were reluctant to devote any resource to preparing due to a general lack of clarity. 

As a result, some businesses would like more information and guidance from HMRC about how EMCS will change, and the potential impacts of this. Some acknowledged that HMRC were unable to provide this at the time of the research, but they wanted HMRC to have an ongoing dialogue with businesses as soon as an arrangement is reached. Large businesses were particularly keen to work closely with HMRC to build and test any new type of EMCS system developed as they felt this would benefit both parties.