HMAG140200 - Notification of cash transactions: detail of the scheme
Which traders must comply with the requirement to notify cash transactions?
What excise goods does the notification requirement apply to?
What alcohol related services are included in the notification requirements?
What must traders do to comply with the requirement?
What types of payments are treated as being cash?
How do traders notify HMRC of cash payments?
When are traders required to notify HMRC of cash transactions?
How should traders treat cash payments that are made in several instalments?
Suggested good practice for submitting cash notifications
Which traders must comply with the requirement to notify cash transactions?
The requirement to notify cash transactions came into force on 1st January 2006 and the following trader groups must comply with this requirement:
- Warehousekeepers registered under the Warehousekeepers and Owners of Warehoused Goods Regulations (WOWGR) 1999;
- WOWGR registered owners of goods in warehouse,
- WOWGR registered duty representatives
Producers registered under the Alcoholic Liquor Duties Act (ALDA) 1979 must also comply with the requirement:
- Spirits producers,
- Registered brewers,
- Wine and made wine producers, and
- Cider and Perry makers.
What excise goods does the notification requirement apply to?
The notification requirement applies to duty-suspended alcohol (i.e. spirits and spirits based beverages, beer, wine, made wine, cider and perry).
What alcohol related services are included in the notification requirements?
Any service that a warehousekeeper or alcohol producer could reasonably be expected to provide to a customer in relation to duty-suspended alcohol. Examples of services include provision of storage, handling, packaging of goods, use of an excise movement guarantee, affixing, removing or obliterating duty stamps.
What must traders do to comply with the requirement?
Notify our contact point immediately on a completed form W7 (PDF 43kb) (Notification of cash payments for alcohol goods or alcohol related services in duty suspension) of all cash payments over £9,000 received for the sale of duty-suspended alcohol and alcoholic beverages, or received for the provision of an alcohol related service for duty-suspended goods. Traders are also required to submit a W7 if they refuse to accept a cash payment from a customer.
What types of payments are treated as being cash?
For the purpose of this requirement cash is defined as: “cash means notes, coins or travellers cheques in any currency”. This is in line with Regulation 2 of the Money Laundering Regulations 2007.
How do traders notify HMRC of cash payments?
All W7 notification forms must be sent to the National Warehouse Returns Centre (NWRC)) via fax or e-mail.
Fax number 0141 555 3506
E-mail - NWRCGlasgow@hmrc.gsi.gov.uk
When are traders required to notify HMRC of cash transactions?
Traders are requested to submit form W7 as early as possible (i.e. without undue delay) following the receipt of cash payments or earlier if possible . For example a trader may know from the outset that they will be paid in cash and early notification will allow the processing of the W7 with any risk evaluation being undertaken prior to the dispatch of duty-suspended alcohol.
How should traders treat cash payments that are made in several instalments?
It may be commercial practice for some customers to pay cash for goods or services in two or more instalments. For example a customer may pay for a supply of goods costing £10,000 in two cash instalments of £5,000. As the total value of the sale and cash to be received exceeds the £9000 notification threshold this should be notified on form W7 (PDF 43kb) when the first cash payment is received.
Officers should consider as part of their assurance test of a trader’s credibility how transparent a trader’s operations and procedures are with respect to the buying and selling of duty suspended alcohol. Where a registered alcohol trader dealing in cash appears to operate in an unnecessarily complicated manner, officers should consider if these arrangements are deliberately complex to confuse the audit trail. Officers should consider whether that trader remains suitable for approval and registration under HMRC’s registration policy (see HMAG30000) along with any other compliance problems or credibility concerns encountered.
Suggested good practice for submitting cash notifications
Responsibility for complying with this requirement will,
- in a production site rest on the producer,
- in a warehouse rest on the warehousekeeper, and
- in the case of a registered owner, or a duty representative, on that person.
Although there is no requirement to appoint and identify a particular nominated official it is strongly recommended that companies designate an identifiable contact point to deal with notifications to ensure compliance with this requirement. Officers are strongly encouraged to discuss arrangements for notifying cash transactions when carrying out assurance activity at registered traders who receive cash payments.
Procedures for recording and notifying cash transactions should be established and recorded in the Caseflow visit report.