HMAG150801 - Excise duty points: irregularity which occurs in Great Britain during an excise duty-suspended movement started by a registered consignor in Great Britain
This section applies when an irregularity occurs in Great Britain during a movement of excise duty-suspended goods which was started by a registered consignor in Great Britain. This covers the movement of goods from the place of import to a warehouse in the United Kingdom or to a place from where the goods will leave the territory of the United Kingdom.
When an irregularity occurs, or is deemed to occur in Great Britain, there is a release for consumption under regulations 6(1)(a) and 7(1)(h), with an excise duty point arising under regulation 5.
‘Irregularity’ means a situation occurring during a movement (or part movement) of excise goods under a duty-suspension arrangement, and the loss is not an allowable one under regulation 21 of the HMDP Regulations. Please refer to notice 197 for more information on losses.
Excise duty point
Where there is a release for consumption under regulations 6(1)(a) and 7(1)(h), an excise duty point arises under regulation 5. There are two regulations which prescribe the time when the goods are released for consumption. These are:
Regulation 80 Irregularity detected during the duty-suspended movement
This applies when an irregularity occurs during a movement of excise duty-suspended goods started by a registered consignor in Great Britain. The irregularity can be discovered during the movement of the goods, on arrival of the goods at their stated destination (where all or some of the goods are found to be missing) or where the movement has been closed on EMCS but there is sufficient evidence to demonstrate that the goods never arrived at their intended destination.
In this case the goods are released for consumption at the time of the irregularity, or where it is not possible to establish when the irregularity occurred, the time when the irregularity is detected or first comes to our attention.
Regulation 81 Failure of excise goods to arrive at their destination
This applies when the duty-suspended movement is not discharged by the arrival of the goods at their stated destination and no irregularity is detected in the course of the movement. It applies to a ‘deemed’ irregularity when the excise duty-suspended movement is not closed on EMCS and no regulation 80 irregularity has occurred or been detected.
In these circumstances, regulation 81(2) applies and an irregularity is deemed to have occurred at the time the movement is started by the registered consignor. The excise duty point is the time when the movement was started by the registered consignor.
This regulation does not apply if the person who is liable to pay the duty is able to satisfy HMRC that the goods did arrive at their stated destination within four months after the movement started.
It also does not apply where the person who is liable to pay the duty did not know, or could not reasonably have known, that the goods have not arrived at their stated destination, is able to satisfy HMRC that the goods did arrive at their stated destination within one month after they have been notified of their liability by HMRC.
Example when Regulation 81 is appropriate
A consignment of wine destined for a warehouse in Hull is imported from Italy and a registered consignor starts the excise duty-suspended movement on EMCS. However, the movement remains outstanding on EMCS after four months. An irregularity is therefore deemed to have occurred under regulation 81(2). Despite investigations, no further information comes to light in respect of this load. The excise duty point is the time when the registered consignor started the duty-suspended movement on EMCS. The person liable to pay the duty is the person who provided the movement guarantee, which in this case is the transporter of the goods.
Person/s liable to pay the duty
The person/s liable to pay the duty where there is a release for consumption under regulations 6(1)(a) and 7(1)(h) are shown in regulation 9.
Under regulation 9(1)(a), where a guarantee is required the person liable to pay the duty is the person who provided the guarantee. The guarantee provider should be shown on EMCS or the Fallback document.
Under regulation 9(2), any other person who participated in the irregularity and who was aware, or should reasonably have been aware, that it was an irregularity is jointly and severally liable to pay the duty.
Participated
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.
Examples of participants who may have a joint and several liability under regulation 9(2) are:
- the transporter or lorry driver who delivers and/or unloads goods at another address,
- the owner or person who instructs the transporter to deliver the goods to another address,
- the person who provides the financial backing for the consignment, and
- a person who purchases excise goods at a price that is ‘too good to be true’.
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.
Each case should be considered on its own merit. Where you are unsure whether the joint and several liability provision can be applied, you should discuss the case with the Alcohol Technical Support team.
Circumstances when the excise duty is not due
If the excise goods are lost or destroyed during an excise duty-suspended movement and HMRC are satisfied that the goods have been irretrievably lost or destroyed (for example, due to an accident, the nature of the goods, or some other unforeseeable event) then there is no excise duty point and no excise duty is due on those goods. This is by virtue of regulation 21.
However, if the excise goods are stolen during the duty-suspended movement, excise duty is always due on the goods.