Clearing excise goods like alcohol, tobacco, and certain oils through customs involves additional steps compared to standard goods due to the specific taxes (excise duties) that apply. Here’s an in-depth look at the process, including how to declare, pay, and manage these goods effectively.
Understanding Excise Goods
Excise goods are products that are subject to additional national taxes, on top of standard import duties and VAT. They include:
Alcoholic beverages (beer, wine, spirits)
Tobacco products (cigarettes, cigars, rolling tobacco)
Certain oils and fuels (e.g., diesel fuel, petrol)
These products require special handling during customs clearance due to the excise duty that must be paid before they can be released into free circulation. Before clearing excise goods, you must submit an import declaration via the Customs Declaration Service (CDS). The key data elements for excise goods include:
Commodity Code: Determines the applicable duties and excise taxes. Use the UK Trade Tariff to find the correct code.
Customs Procedure Code (CPC): Specify the procedure you are following. For excise goods, common CPCs include codes for duty-paid warehousing or excise suspension.
Excise Duty Calculations: Indicate the quantity and volume of excise goods, as excise duty is usually calculated based on these measures (e.g., per litre of alcohol or per kilogram of tobacco).
You must also include an Excise Movement and Control System (EMCS) reference number if the goods are under excise duty suspension.
Using the Excise Movement and Control System (EMCS)
If you are transporting excise goods under duty suspension (e.g., goods moving between bonded warehouses), you must use the EMCS. This system tracks the movement of excise goods to ensure taxes are paid at the correct point. The process involves:
Submitting an eAD (electronic Administrative Document): This document accompanies the goods and is submitted via the EMCS.
Receiving a Movement Reference Number (MRN): This number confirms that the movement has been authorized.
Closing the Movement: The receiving warehouse must confirm receipt of the goods in EMCS, after which the duty may become payable.
Calculating and Paying Excise Duty
Excise duty rates are set by HMRC and vary based on the type and quantity of goods. Key factors include:
Alcohol by Volume (ABV) for alcoholic drinks
Weight or volume for tobacco products
Product type (e.g., petrol vs. diesel for fuel)
To calculate the duty, multiply the quantity by the applicable duty rate. You can find the current rates on HMRC’s website.
Payment Options:
Deferment Account: Importers can use a duty deferment account (DDA) to pay excise duties. This account allows you to delay payment until a set date each month, easing cash flow.
Immediate Payment: If you don’t have a DDA, you must pay the excise duty immediately upon import via the CDS payment options (BACS, CHAPS, or direct debit).
Submitting Your Payment and Completing the Entry
Pay via CDS: Once the entry is submitted in CDS, you will receive a notification of the duties owed. Pay through one of the available methods (e.g., direct debit, debit/credit card, or through a duty deferment account).
Receive Clearance: Upon payment, HMRC will release the goods into free circulation or to the next point in the supply chain (e.g., a bonded warehouse).
Bonded Warehousing for Excise Goods
Many importers choose to store excise goods in a bonded warehouse. This allows you to defer payment of excise duty until the goods leave the warehouse for the domestic market. If goods are re-exported, no excise duty is payable.
Entering Goods into a Bonded Warehouse: Use the appropriate CPC and indicate the warehouse details in the customs entry.
Exiting the Warehouse: Submit a new customs declaration and pay the applicable excise duty when the goods are released for sale.
Tips for Compliance
Ensure Accurate Declarations: Mistakes in declaring excise goods can result in significant fines and delays.
Use a Customs Broker: Given the complexity, many businesses choose to work with customs brokers or consultants, such as Roadway Customs LTD, to ensure compliance and streamline the process.
Keep Records: Maintain detailed records of all excise declarations and payments for audit purposes.
How Roadway Customs LTD Can Assist
At Roadway Customs LTD, we specialize in customs consultancy, including handling excise goods.
Contact us today to simplify your excise goods imports and ensure full compliance with UK customs regulations. For more details, visit Roadway Customs LTD.
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