HMRC internal manual

Debt Management and Banking Manual

DMBM535045 - Debt and return pursuit: Excise Duties (other than APD): Who is liable to pay the debt? Registered Excise Dealers & Shippers (REDS)


What are REDS

Registered Excise Dealers and Shippers (REDS) are revenue traders who are approved byus and registered with us to receive excise goods commercially from other EuropeanCommunity countries.

There are four categories of REDS:

  • Principals, who import goods purely for their own use
  • Agents, who may act for one or more importers
  • Principal/Agents, may import some goods for their own business but also act as an agent for other importers and
  • Tax Representatives, who account for duty on behalf of one or more traders in other EU countries. There is a link to distance selling, details of which can be found in Notice 197 Excise goods: holding and movement Part 90.

Almost all excise goods dispatched to REDS will be dispatched under duty-suspensionarrangements (payment postponed).

REDS are not allowed to hold goods in duty suspension. The duty is due (and must berecorded in the trader’s duty account), when the goods are imported into the UK orpass a UK duty point.

The use to which the goods may subsequently be put in no way affects the date on which theduty deferment account is debited. The class of goods defines the debit date (e.g. 25th ofthe month for beer duty, 15th of the month for other goods).

REDS must already be registered for VAT, and there is provision for group or divisionalregistrations.

Regulation 14 of the Excise Goods (Holding, Movement, Warehousing and reds) Regulations1992 provides for monthly returns to be rendered within 4 consecutive days of themonth-end. Where any of those 4 days are not business days, the return must be renderedwithin 3 consecutive business days of the month-end.

Importer liability

Debts will arise within the REDS regime as a result of the non-payment of:

  • a fixed penalty issued for non-compliance;
  • a BACS debit on the respective duty deferment debit day; or
  • an assessment (EX601) for duty due on goods not included in the trader’s monthly return.

The REDS is liable to pay the duty due on the goods he imports, even when acting onbehalf of someone else. Regulation 5 (1) of the Excise Goods (Holding, Movement,Warehousing and REDS) Regulations 1992 [S.I 1992/3135], provides:

“The person liable to pay the duty in the case of an importation of excise goods fromanother member state shall be the importer of the excise goods.”

“Importer of excise goods” means any owner of those goods or any personbeneficially interested in those goods.

If a REDS acts without the specific authority of the importer, we should first approachthe REDS for payment of the duty due.

Other persons liable to pay with the importer

Under Regulation 5(2) of The Excise Goods (Holding, Movement, Warehousing and REDS)Regulations 1992, each of the following persons is liable, jointly and severally with theimporter, for the payment of unpaid duty

  • any REDS acting on behalf of the importer of the goods in respect of the importation of those goods
  • any other person acting on behalf of the importer of the goods in respect of the importation of those goods
  • any vendor of the goods consigned to the UK under a distance-selling arrangement;
  • any tax representative of the vendor
  • any consignee of the goods that have been imported into the UK and
  • any other person who causes or has caused the imported goods to reach an excise duty point.

Pursue the REDS Agent for payment where an importer (who has the prime liability) failsto pay the duty due.

Distance selling

Where a trader in one Member State of the EU supplies excise goods commercially to aprivate person in another Member State, this is described as distance selling. Thesupplier must (before despatching the goods), appoint a tax representative in hiscustomer’s Member State to:

  • act on his behalf and
  • assume the legal responsibility to account for and pay the full amount of duty and VAT due on goods sent by the vendor.

Deferment Arrangements

Regulation 6(1) of the Excise Goods (Holding, Movement, Warehousing and REDS)Regulations 1992 provides:

“Subject to paragraph (2) below and save as the Commissioners may otherwise directduty shall be paid on or before an excise duty point.”

“Paragraph (2)” refers to duty deferment arrangements.

The payment-day for REDS transactions is the 15th of each month following each accountingperiod (except for beer that is the 25th of each month). Before the payment date, eachdeferment account holder is sent a statement showing the amount to be debited by REDCENT.As there may be other non-REDS transactions (i.e. C88 importations) CDO send a cumulativeprint shortly before the BACS debit date.