How to move, store and trade duty-suspended and duty-paid excise goods.
Moving excise goods in duty-suspension
When excise goods are moving within the European Union (EU) in excise duty-suspension, the movement must take place between persons and premises that have been approved for that purpose by the competent authorities in the member state where they are based.
Excise goods may only be moved in excise duty-suspension once they are in ‘free circulation’. This applies to goods that have been wholly produced in the EU or goods that have been imported into the EU and have been released to free circulation on completion of all import formalities and payment of any customs duties.
Generally, excise goods that are moving within the EU in excise duty-suspension must be covered by financial security in the form of a movement guarantee. It is the consignor’s responsibility to ensure that a valid movement guarantee is in place, with detail of the guarantee recorded on the appropriate movement documentation prior to the goods being dispatched in duty-suspension.
Excise Movement and Control System (EMCS)
All duty-suspended movements of excise goods taking place within the EU must be recorded on EMCS unless the goods are allowed to move under simplified procedures.
Storing excise goods in duty-suspension in the UK
If you’re based in the UK and intend to receive, store and dispatch ‘free circulation’ excise goods in duty-suspension, you’ll need to have your premises approved as an excise warehouse, which is a specific type of tax warehouse. As the operator of the excise warehouse, you will also need to be approved as an authorised warehousekeeper.
An excise warehouse is any place of security approved by HMRC where goods liable for excise duty can be stored without payment of the duty for such periods and subject to such conditions as they see fit.
Excise duty is suspended whilst goods are held in an excise warehouse but you must get permission from HMRC if you intend to store duty-suspended and duty-paid goods in the same premises.
The 3 categories of excise goods that can be held in an excise warehouse in duty-suspension are:
- alcohol products including beers, wines and spirits
- tobacco products including cigarettes, cigars and loose tobacco
- energy products including hydrocarbon oils and biofuels for use as motor or heating fuel
Please note that HMRC doesn’t allow UK manufactured tobacco products intended for use in the UK to be stored in an excise warehouse. Such goods can only be warehoused if they are intended for a duty-free purpose such as:
- goods for export
- for sale from an export shop
- for supply to embassies within the UK
- for use by visiting forces
- for use as ships’ or aircraft stores
General storage and distribution warehouses
These are premises used for the general storage and dispatch of alcohol and tobacco goods in duty-suspension. In order for these premises to be considered for approval, they must meet one of the following minimum throughput levels:
- a minimum potential duty liability of £500,000 on the average monthly stockholding of duty-suspended excise goods
- a duty liability of at least £2 million on an annual throughput of duty-suspended excise goods
Trade facility warehouses
These are premises where excise goods can be stored in duty-suspension for one of the following purposes:
- the maturation of spirits
- goods which will not bear UK excise duty, for example, goods for export, goods used in pharmaceuticals, goods used in foodstuffs, goods to be removed for use as ship or aircraft stores
- performing an allowable operation on the goods
- any other purpose allowed by HMRC
Trade facility warehouses do not have to meet the minimum throughput levels of a general storage and distribution warehouse, but approval will be restricted to the specific trade need applied for, for example, the warehouse approval may be limited to the storage of spirits for bottling.
Motor and heating fuels warehouses
These are premises where mineral (hydrocarbon) oil, biofuels and special energy products may be stored in duty-suspension.
Excise warehouse premises guarantees
HMRC requires financial security (in the form of a guarantee) relating to the storage of duty-suspended excise goods in an excise warehouse.
Read about excise warehouse premises guarantees.
Who can store goods in an excise warehouse?
If you own excise goods and you want to store them in duty-suspension, you’ll need to be approved by HMRC in order to deposit those goods in an excise warehouse.
If you’re a UK-based owner of excise goods, you will need to be approved by HMRC as a registered owner. If you are an overseas owner without a fixed UK address, you’ll need to appoint someone who is approved by HMRC as a duty representative to act on your behalf.
In general, only the warehousekeeper of the warehouse concerned, a registered owner, or an overseas owner with a duty representative acting on their behalf can deposit goods in an excise warehouse.
Read more about owners and duty representatives.
Apply for approval
You should apply for approval by using:
- form EX60 if you’re a registered owner
- form EX64 if you want to act as a duty representative
- form EX61 if you want to apply for approval as an authorised excise warehousekeeper - as well as:
Read more about HMRC approval, authorisation and registration.
Move goods into and out of an excise warehouse
Excise warehousekeepers are responsible for accounting for all excise goods entering or leaving their warehouse premises.
Receive excise goods from countries not in the EU - registered consignors
If you’re an authorised warehousekeeper receiving excise goods that have been imported from a non-EU country and the intention is to store those goods free of all duties, you must hold both an excise warehouse and customs warehouse approval for your premises.
If the person importing the goods wishes to suspend the excise duty only, they must arrange for the goods to be placed in an approved excise warehouse. However, this can only be done once the excise goods have been released to free circulation on completion of all import formalities and payment of any customs duties.
The excise duty-suspended movement from the place where the goods are released to free circulation, for example a port or airport in the UK, to the excise warehouse must be carried out by someone who is approved as a registered consignor.
HMRC will only approve the import agent for the goods or the authorised warehousekeeper receiving the goods from the place of release for free circulation as a registered consignor. If either of these persons wishes to apply for approval, they must complete and submit form EX72, and form EXCISE 102 in the case of a partnership.
Please note that duty-suspended movements of excise goods from registered consignors are subject to EMCS procedures. If you’re approved as a registered consignor, you will also need to register and enrol for EMCS.
Remove or dispatch goods from an excise warehouse
As an excise warehousekeeper, you may remove goods from your excise warehouse for:
- home use on payment of duty (sometimes referred to as the goods being ‘released for consumption’ in the UK)
- dispatch under duty-suspension to other approved UK warehouses
- dispatch under duty-suspension to approved persons or premises in other EU member states
- export to non-EU countries in duty-suspension
You may also be allowed to carry out the following miscellaneous removals:
- supplies to diplomats and visiting forces within the UK
- supplies to entitled international organisations, embassies and forces in other member states
- supplies to HM ships
- removal of goods for use as ships or aircraft stores
- removals to authorised duty-free spirits users
- delivery of spirit-based flavourings and essences that are exempt from excise duty
Export to non-EU countries
If you’re the dispatching warehousekeeper exporting duty-suspended excise goods from the UK to non-EU countries, you must ensure that you fully comply with all excise requirements as well as any separate customs export declaration requirements.
Read about export procedures.
Excise warehouse returns
All authorised warehousekeepers (except those currently operating certain trade facility warehouses such as export shops and aircraft store floors) are required to submit a W1 excise warehouse return for each set of premises they operate, in respect of alcohol and tobacco goods.
You can submit your W1 returns electronically using the Alcohol and Tobacco Warehousing Declaration (ATWD) service.
Pay or defer duty when moving excise goods
When goods are released from an excise warehouse for consumption, you must ensure that the excise duty has been paid or accounted for prior to the removal of the goods. For immediate payment of duty you must use cash or an equivalent method such as a banker’s draft, Bacs or CHAPS.
If payment is being made by cash or equivalent, you should submit the following payment warrants to HMRC along with the remittance:
- form W5 for the removal of alcohol goods
- form W6 for the removal of tobacco goods
- form W50 for the immediate payment of excise duty including Mineral (Hydrocarbon) Oil Duty
Form W50 isn’t available to be downloaded but you can order supplies from the Excise and Customs Helpline.
Excise duty deferment
Duty can only be deferred if you have been authorised to do so by HMRC.
Read about applying for duty deferment approval.
If you’ve been approved to defer payment of the excise duty and wish to account for the duty under deferment arrangements, you must submit the following warrants to HMRC:
- form W5D for the removal of alcohol goods
- form W6D for the removal of tobacco goods
- form HO10 for the removal of mineral (hydrocarbon) oils
Form HO10 is not available via the HMRC website but you can order supplies from the Excise and Customs Helpline.
You can also submit forms W5D and W6D using the ATWD online service.
Read about excise duty deferment, VAT and other charges.
Excise Payment Security System
In order to defer duty, you’re normally required to take out a guarantee to cover your total monthly liabilities. Under Excise Payment Security System you may be able to defer payments of excise duty without a guarantee.
Registered consignees are revenue traders who are approved and registered by HMRC to receive and account for the duty on duty-suspended excise goods from other EU member states. They must account for the UK excise duty when the goods are received in the UK. They can’t receive duty-suspended excise goods from outside the EU (not to be confused with registered consignors) and they can’t hold or dispatch goods in duty-suspension.
Read more about registered consignees.
Temporary registered consignees
Temporary registered consignees are excise traders that are registered and approved by HMRC to import duty-suspended excise goods into the UK from other EU member states on a consignment-by-consignment basis. They aren’t permitted to hold or dispatch excise goods in duty-suspension or to receive excise duty-suspended goods from UK suppliers or from outside the EU.
Read more about temporary registered consignees.
Dealing in duty-paid excise goods
If you intend to import into the UK, or arrange the importation of, excise goods that are duty-paid, or released for consumption, in another EU member state for a commercial purpose, the goods will be liable to excise duty in the UK. There are 3 different ways in which duty-paid excise goods can be imported into the UK for a commercial purpose:
- the standard UK duty-paid scheme for unregistered commercial importers
- the registered commercial importer scheme
- distance selling arrangements for sales to private individuals
Unless the goods are being dispatched under distance selling arrangements, movements of duty-paid excise goods between EU member states must be covered by a 3-part document known as a Simplified Accompanying Administrative Document (SAAD).
The Standard Duty-paid Scheme
You don’t need to be registered with HMRC to use this scheme. However, before commercially importing any duty-paid excise goods, you should notify HMRC by submitting a form HM4 at least 15 working days in advance of the intended date of each dispatch.
You must secure the UK excise duty that is due on the goods by submitting your payment, in the form of a banker’s draft, postal order or cheque, along with the form HM4. HMRC will return the form HM4 to you, endorsed with a unique reference number for that particular consignment.
Your supplier shouldn’t dispatch the goods until you’ve notified them of the unique reference number, which should then accompany the goods along with a completed SAAD. Under the standard scheme, the goods can only be delivered to your business premises, as stated on the form HM4.
You must inform HMRC of any changes to the information you’ve supplied as soon as they occur, and certainly before the goods arrive in the UK. You must notify HMRC as soon as you receive the goods and then, within four working days, return the form HM4 to HMRC along with a copy of the receipted SAAD and, if appropriate, payment for any outstanding duty or VAT.
The Registered Commercial Importer Scheme
This scheme allows you to import duty-paid excise goods into the UK and defer payment of the duty using your own or someone else’s duty deferment account. Under this arrangement the duty is guaranteed by the duty deferment guarantee.
Apart from the difference in the duty payment method and the ability to have the goods delivered to other business addresses, the same procedures apply to registered commercial importers as to those traders using the standard duty-paid scheme.
If you wish to apply for approval as a registered commercial importer, you’ll need to meet certain criteria, for example, you must have a place of business in the UK and be able to demonstrate a business need and suitability to be a registered commercial importer.
You should apply for approval by completing and submitting form HM3. You’ll have to provide a Deferment Approval Number (DAN) on the form HM3 - this can be your own or someone else’s. If you intend to use someone else’s, you will also need to submit a completed form HM8 for each deferment account you intend to use.
Get form HM8 - Authority to use another trader’s DAN.
Distance selling of excise goods
Distance selling takes place when a trader in one EU member state supplies goods to a private individual in another member state and the vendor (seller) is responsible, directly or indirectly, for delivery of the goods. Distance selling includes mail order and internet sales.
When excise goods are being supplied under distance selling arrangements, they must be taken from duty-paid stock. The vendor is liable to pay the excise duty and VAT of the member state of destination at the time of delivery. The excise duty must be guaranteed to the satisfaction of the fiscal authority of destination before the goods are dispatched.
In the UK, it’s a tax representative approved by HMRC, who guarantees to pay the excise duty on the vendor’s behalf. Following the dispatch, the tax representative must account for and pay the full amount of excise duty and VAT due on the goods sent by the vendor.
When making distance sales to the UK, it’s the vendor’s responsibility to make sure that a UK tax representative is appointed.
UK tax representatives are traders who are approved and registered in the UK to account for excise duty on distance sales to private individuals in the UK on behalf of vendors in other EU member states.
If you wish to apply for approval as a UK tax representative, you must have a place of business in the UK and you must have your own deferment account in place as you’ll need to use it to account for the duty. You aren’t permitted to use anyone else’s deferment account to account for the duty on distance sales.
You should apply for approval by completing and submitting form HM9.
The requirement to submit a form HM4 for each import of duty-paid excise goods also applies to UK tax representatives.
Read about commercial importers and tax representatives.
If you’re a UK vendor supplying excise goods to private individuals in other member states under distance selling arrangements, you’ll be responsible for paying the excise duty and VAT in the member state of destination. You should find out from the authorities in that member state how you must do this, including whether you will need to appoint a tax representative in that member state.
Although there’s no requirement for any official documentation to accompany excise goods moving under distance selling arrangements, it’s advisable that commercial documentation accompanies the consignment showing details of the tax representative in the member State of destination who is to account for the duty.
EU suppliers should also be aware of the rules about registering for VAT when making distance sales to other member states including the UK.
Read about the UK’s requirements relating to VAT and distance selling.
UK Duty Stamps and fiscal marks
If you make or import retail containers of spirits, wine or made-wine, you may need to affix a duty stamp or include one on your label.
You’ll also need to include a fiscal mark if you import or manufacture certain tobacco products in the UK.
Excise duty drawback
Excise duty drawback is a refund of UK excise duty. It’s made when UK duty-paid excise goods haven’t been and won’t be consumed in the UK, providing certain conditions and requirements are met.
Read more about excise duty drawback.
Read more about receipt into and removal from an excise warehouse of excise goods.