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 Warehouses

As 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

Full details of how an excise warehouse should be operated and the responsibilities you have as an excise warehousekeeper are in notice 197 that you can download from the HMRC website. Note that your business an use third party excise warehouses to store excise goods. It is vitally important that you check that the third party warehouse you want to use has been fully approved by HMRC to hold excise goods legally.

Export Warehousing and Duty Drawback

If 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 Tariff

It 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 Warehouse

You have a choice of two general types of warehouse to use when you want to store excise goods:

Trade Facility
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.

General Storage
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.

Placing Goods in a Customs Warehouse

Any approved warehouse can receive goods into its premises. You should be aware of the special systems you must use when placing tobacco products in a customs warehouse. It is also possible to receive goods from another customs warehouse. If this is the case the goods should be supported by the Internal Accompanying Document otherwise known as W8. If goods are moved to a customs warehouse from an EU Member State they should be accompanied by the Administrative Accompanying Document (AAD). And goods from none EU countries will need to have a fully completed SAD (Single Administrative Document) form.

Removing Goods from a Customs Warehouse

Moving your goods from a customs warehouse must be accompanied by the relevant documentation. This is usually the AAD or W8 form as these are your export declaration documents. Any duty that the goods have attached to them must be paid before the goods are removed from the customs warehouse. If you or the warehouse you are using has been approved, you can defer the payment of duty. You will need to complete W5D and W6D that you can obtain from the HMRC website.