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HMRC internal manual

Holding and Movements Assurance Guidance

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HM Revenue & Customs
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Excise duty points: irregularity during a movement of duty-suspended goods

When an irregularity occurs during a duty-suspended movement, or is deemed to occur in the UK, those goods are released for consumption under the HMDP Regulations (regulations 6(1)(a) and 7(1)(h) refer) and a duty point arises under regulation 5.

‘Irregularity’ means a situation occurring during a movement (or part movement) of excise goods under a duty-suspension arrangement, where that movement is not discharged in accordance with EMCS requirements and the loss is not an allowable one under regulation 21 of the HMDP Regulations. Please refer toNotice 197 (HMRC website) and HMAG60000 guidance for details on EMCS and losses.

There are two regulations which prescribe the time when goods are released for consumption because an irregularity occurs, or is deemed to have occurred in the UK. These are:

HMDP Regulation 80 - Irregularity occurring or detected in the United Kingdom

This regulation applies to both inward and outward movements. Regulation 80(2) applies when an irregularity occurs (or there is reasonable evidence to suggest it occurred) in the UK. Regulation 80(3) applies when an irregularity is detected in the UK in the course of movement and it is not possible to establish in which Member State it occurred. In the course of movement means the UK leg of the journey, including the point of discharge at the legitimate destination in the UK.

You should take all reasonable steps to try and establish where the irregularity took place, and the time it occurred, before making an assessment. When it can be established that an irregularity has occurred in the UK and the time it occurred is known, that time is the excise duty point. A duty point also arises when an irregularity is detected in the UK in the course of a movement but it is not possible to establish in which Member State it occurred. The duty point, in this case, is the time when the irregularity first comes to our attention.

Examples when Regulation 80 is appropriate

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Payment of the duty

When an irregularity occurs or is detected in the UK during a duty-suspended movement so that goods are released for consumption in the UK by virtue of regulation 80, the person/s liable to pay the duty are prescribed in regulations 9(1)(a) and 9(1)(b).

Liability when a movement guarantee is required

Where a guarantee is required for a movement of duty-suspended goods, regulation 9(1)(a) places liability on the person who provided the movement guarantee. This should be shown in Box 11 of the eAD.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Who can provide the movement guarantee

The UK limits those person/s who can provide a movement guarantee for a duty-suspended movement. In the case of a movement leaving an excise warehouse in the UK the guarantee must be provided by:

  • the authorised warehousekeeper,
  • the last owner of the goods (person with ownership of the goods at the time they are removed from the warehouse); or
  • the transporter of the goods.

Where a UK registered consignor dispatches the goods under a duty-suspended movement, the guarantee must be provided by:

  • the registered consignor,
  • the owner of the goods,
  • the consignee (importer) of the goods may also provide the guarantee; or
  • the transporter of the goods.

Different guarantee rules apply when goods are consigned by other Member States. For example, some countries will accept a movement guarantee from the consignee in another Member State.

Liability when a movement guarantee is not required

Where a guarantee is not required, regulation 9(1)(b) specifies that the person liable to pay the duty is the authorised warehousekeeper (where goods are consigned from an excise warehouse in the UK) or the registered consignor (where goods are dispatched upon release to free circulation in the UK).

Joint and several liability

Regulation 9(2) places a joint and several liability on any other person who participated in the irregularity and who was aware, or should reasonably have been aware, that it was an irregularity.

Participated and the ‘means of knowledge’

The word ‘participated’ has a wide meaning which can include any person who took part in, became actively involved in, or shared in an activity. The regulation restricts participant liability to those who were aware, or should reasonably have been aware, that it was an irregularity.

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In addition, you should consider whether there is anyone else involved, who by their action, also knowingly participated in the irregularity. The test is not that the person or business ‘directly’ participated in the irregularity but that it did participate in some way and was aware, or should reasonably have been aware that it was an irregularity.

Example of means of knowledge

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You need to consider each case on its own merit. Where you believe that another person has a joint and several liability under this provision you should discuss the case with the Holding and Movement Policy team before notifying that person.

Circumstances when UK duty is not due

When excise goods are consigned to the UK but are not discharged to the satisfaction of the consigning Member State Authority, the duty becomes due in that other Member State (MS of departure) after four months. UK duty would only become payable if you are satisfied that the irregularity occurred in the UK under regulation 80(2).

Where liability falls outside the UK

If at any time, you establish that the irregularity which caused those goods to be released for consumption occurred in another Member State, excise duty becomes due in that other Member State.

If the irregularity was found to occur in another Member State after UK duty has been collected, the person who paid the excise duty in the UK is entitled to claim a repayment of the duty under regulation 82 of the HMDP Regulations, provided that:

  • the time that the irregularity occurred in another Member State is within three years of the start of the movement, and
  • the duty has been paid (or no duty was due) in the Member State where the irregularity occurred.

Any claim must be made in writing and should include evidence to satisfy you that the duty has been paid (or was not due) in that other Member State.

HMDP Regulation 81 - Failure of excise goods to arrive at their destination

This regulation only applies to a ‘deemed’ irregularity which occurs when a movement is consigned from the UK but is not discharged at its stated destination (and no regulation 80 irregularity has occurred or been detected).

It is not necessary to establish the precise nature of the irregularity; instead you need to demonstrate that the goods did not arrive at their stated destination (this includes non-receipt of the goods on EMCS). In these circumstances, regulation 81(2) applies and an irregularity is deemed to have occurred at the time the movement started. The excise duty point is the time when the goods left the UK warehouse or when the UK registered consignor released the goods. An assessment can be made if the movement is not discharged after four months.

This regulation does not apply when the guarantor for that movement is able to provide satisfactory alternative evidence to show that the goods did arrive at their stated destination or is able to prove that the irregularity occurred in another Member State.

Alternative evidence to discharge the movement

Before you make an assessment for a duty point arising under regulation 81, you should first ask the person liable (this is normally the person who provides the movement guarantee) for alternative evidence to show that the goods did arrive at their stated destination or that the irregularity occurred in another Member State. If this person is not in a position to know that the goods have not arrived at their stated destination (for example, if the first transport company provides the movement guarantee), then under regulation 81(4) you must allow that person an additional month to produce alternative evidence in order to discharge the movement. You should make an assessment if after one month satisfactory evidence is not provided.

You will find further information on the acceptable forms of alternative evidence in Notice 197 (HMRC website)

Examples when Regulation 81 is appropriate

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

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Payment of the duty

When an irregularity occurs or is detected in the UK during a duty-suspended movement so that goods are released for consumption in the UK by virtue of regulation 81, the person/s liable to pay the duty are prescribed in regulations 9(1)(a) and 9(1)(b).

Liability when a movement guarantee is required

Where a guarantee is required for a movement of duty-suspended goods, regulation 9(1)(a) places liability on the person who provided the movement guarantee. This should be shown in Box 11 of the eAD.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Who can provide the movement guarantee

The UK limits those person/s who can provide a movement guarantee for a duty-suspended movement. In the case of a movement leaving an excise warehouse in the UK the guarantee must be provided by:

  • the authorised warehousekeeper,
  • the last owner of the goods (person with ownership of the goods at the time they are removed from the warehouse), or
  • the transporter of the goods.

Where a UK registered consignor dispatches the goods under a duty-suspended movement, the guarantee must be provided by:

  • the registered consignor,
  • the owner of the goods,
  • the consignee (importer) of the goods may also provide the guarantee; or
  • the transporter of the goods.

Liability when a movement guarantee is not required

Where a guarantee is not required, regulation 9(1)(b) specifies that the person liable to pay the duty is the authorised warehousekeeper (where goods are consigned from an excise warehouse in the UK) or the registered consignor (where goods are dispatched upon release to free circulation in the UK).

Joint and several liability

Regulation 9(2) places a joint and several liability on any other person who participated in the irregularity and who was aware, or should reasonably have been aware, that it was an irregularity.

Participated and the ‘means of knowledge’

The word ‘participated’ has a wide meaning which can include any person who took part in, became actively involved in, or shared in an activity. The regulation restricts participant liability to those who were aware, or should reasonably have been aware, that it was an irregularity.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

In addition, you should consider whether there is anyone else involved, who by their action, also knowingly participated in the irregularity. The test is not that the person or business ‘directly’ participated in the irregularity but that it did participate in some way and was aware, or should reasonably have been aware that it was an irregularity.

Example of means of knowledge

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

You need to consider each case on its own merit. Where you believe that another person has a joint and several liability under this provision you should discuss the case with the Holding and Movement Policy team before notifying that person.

Where liability falls outside the UK

If at any time, you establish that the irregularity which caused those goods to be released for consumption occurred in another Member State, excise duty becomes due in that other Member State.

If the irregularity was found to occur in another Member State after UK duty has been collected, the person who paid the excise duty in the UK is entitled to claim a repayment of the duty under regulation 82 of the HMDP Regulations, provided that:

  • the time that the irregularity occurred in another Member State is within three years of the start of the movement, and
  • the duty has been paid (or no duty was due) in the Member State where the irregularity occurred.

Any claim must be made in writing and should include evidence to satisfy you that the duty has been paid (or was not due) in that other Member State.