How Excise Warehousing Operates
Operating an import/export business will inevitably mean you will have to store goods before they are sent to customers or processed into new items for sale. As goods move into and out of the UK, they will usually attract some form of taxes such as VAT or excise duty. To help your business better manage its cashflow, you can suspend the tax on certain goods if they are stored in a special warehouse. Excise warehouses are premises that HM Revenue & Customs (HMRC) have approved for suspension of excise duty.
Excise WarehousesAs an excise warehousekeeper you can only store certain excise goods that include:
- Motor fuels and other energy products
- Tobacco that is not intended for the UK domestic market
- Alcohol products
Export Warehousing and Duty DrawbackIf you have goods warehouses that have already had their excise paid, you may be able to get a refund on the goods you are storing. This is called duty drawback. To drawback the duty you have paid, certain conditions must be met that include:
- The goods have not been consumed in the UK
- You paid the duty on the goods no more than three years before your application for drawback
- You have paid or at least guaranteed payment of the duty in an EU Member State
- All of the conditions that the HMRC layout for a drawback claim have been met
The drawback system can be quite complex to navigate as your business must provide detailed information about the goods you want to drawback excise duty on. The customs notice 207 has detailed information about the entire system that you can read on the HMRC website.
Duty and the TariffIt is important that your business has the correct rate of duty attached to each of the goods that are stored in an excise warehouse. You can calculate the right level of duty by consulting the Tariff. This lists all excise goods with their corresponding duty levels. The Tariff is available in a variety of formats. Contact HMRC for further details and help with classifying your excise goods.
Types of WarehouseYou have a choice of two general types of warehouse to use when you want to store excise goods:
These warehouses can be used to store duty suspended goods that fall into three categories: Goods that are spirits that will be warehoused while they mature. The warehouse will usually be based at a distillery. Goods that are not liable for UK excise duty as they will be exported. Goods are stored before they are modified using an allowable process under HMRC excise duty rules.
As its name suggests, if you are storing ordinary excise goods that will be distributed to the UK market, any general warehouse that has HMRC approval can be used to store your business’s goods.