Excise Goods - REDS
Martintrux became a Registered Excise Dealer and Shipper (REDS) Agent in 1993 when the Single Market became a reality for the United Kingdom; and was immediately swamped with strange pieces of paper from Belgian Breweries and Italian Vineyards.
Fortunately, the procedure for handling Excise goods ‘in excise suspension’ across EU Borders has been re-written and updated to include electronic monitoring.
The standing of a REDS Agent has been broken down, and then renamed in recent years, to account different circumstances – Registered Consignee, Registered Importer and Tax Representative: all of which require the authorized entity to hold a Deferment Account for the payment of UK Excise to be paid and to create a record of anticipated arrivals and effectively pay the UK Excise if the named shipment is proved to reach the UK – whether or not it actually arrives at its destination.
Our references appear on the SEED database of the EU (System for the Exchange of Excise Data), as being able to receive from EU suppliers: Beer and Beer based drinks; Cider and Perry; Sparkling or Still Wine and Wines specifically classified such as Champagne; Spirits and Spirit based beverages; and, most Hydrocarbon Oils or Oil Based Products.
- Registered Consignee - to account UK Excise as a third-party for immediate release for consumption on arrival UK, of Excise Goods received from another EU Member State under Excise Suspension.
- Registered Importer – to account UK Excise for own account or as a third-party for immediate release on arrival UK, of Excise Goods received from another EU Member State as excise paid.
- Tax Representative – to account UK Excise as a third party on behalf of a ‘Distance Seller’, based in another EU Member State but operating a UK VAT Number, for supplies of Excise Goods to private individuals in the UK, as excise paid.
Excise Goods shipped as ‘Excise Paid’ - in this context, it means the Excise has been paid and remains secured in the EU Member State of Despatch. This Excise amount can be reclaimed in the original EU Member State, under ‘draw back’ once the Registered Importer or Tax Representative procedures are confirmed as having been completed satisfactorily in the nominated EU Member State of receipt.
Registered Consignee Procedure:
It is mandatory for the Consignor to be previously registered for the EMCS System and the particular type of Excise Goods. A valid Excise Number of the formal Consignee is required, and an Excise Movement Guarantee must be quoted; held by any one of the parties involved in the transactions – it cannot be bought in from a third party. Martintrux Dover do not offer an Excise Movement Guarantee, but we find most Excise Warehouses and many EU producers – Breweries, Vineyards – hold an Excise Movement Guarantee as part of their ‘Bond’ arrangement. If none of the apparent parties to the transaction holds an Excise Movement Guarantee, the only option is to engage a haulier with their own Excise Movement Guarantee to transport the goods – and expect to pay a premium on the freight cost.
With successful submission, EMCS generates an ARC reference. A 'travelling copy' of the EMCS declaration quoting the ARC must accompany the goods. This document used to be called an 'AAD' - Administrative Accompanying Document - but after EMCS is now called an 'eAD'. Once on the system with our references, Martintrux is prompted and can view the item on EMCS, to compare the notice to our prior record of the consignment, and key to the system our formal agreement, as the responsible party to account relative UK Excise for the shipment. Following details of delivery, noting any discrepancies, Martintrux are obliged to confirm the arrival to the EMCS System, to discharge liability from the relevant Excise Movement Guarantee – before accounting the relative UK Excise due against our Deferment Account or that of the Buyer.
The UK Buyer must then account for VAT under the Reverse Charge Procedure, through his VAT Return, as with any other Intra EC Acquisition. However, the UK Excise amount should be added to the value of the Acquisition.
Registered Importer Procedure:
Tax Representative (Distance Selling) Procedure:
For Distance Sales of Excise Goods from EU Member State companies to private individuals in the UK – usually to fulfil orders made via internet sites or mail order.
The Distance Seller must obtain UK VAT Registration – to be administrated directly as a non-domicile company ( EU terminology uses the phrase Non Established Tax Person – NETP ), or to be under the control of a Fiscal Representative – usually an Accountant’s office. This pseudo UK entity must make UK VAT Returns as if the supplies to the private individuals have been made domestically.
The Distance Seller collects orders and notifies the Tax Representative the total orders to be despatched on a single day. The Tax Representative notifies UK Customs of the intended despatch, with details of each line Excise Product – and then makes a summary of each Excise Type with litres of product and litres of alcohol, and confirms the relative UK Excise will be accounted. HMR&C acknowledge this pre-advice and issues a Notice To Proceed. On receipt of the Notice To Proceed, the Tax Representative can advise the Consignor to despatch the goods.
Each individual shipment – whether or not delivered to the UK in consolidation to be split down into individual packages to be handled by a Courier or Post service, must be accompanied by an invoice which must include –
- The name and address of the actual Supplier.
- A statement that UK VAT will be accounted under the UK VAT Registration Number operated by the EU Supplier.
- A statement that UK Excise will be accounted under the Excise Number of the Tax Representative.
It is optional to state the actual UK Excise and UK VAT sums.
The Tax Representative can supply a separate confirmation of the relative accounting of UK Excise to HMR&C, which can be used by the Consignor to apply for a refund of the original local excise paid in the EU Member State of Despatch, under draw-back procedures.
The Distance Seller must account for UK VAT under the Reverse Charge Procedure, through his VAT Return, as with any other Intra EC Acquisition, as Input Tax – and also account Output Tax as a collection of VAT (whether or not ‘inclusive’) on the final sale deemed to have taken place in the UK.