Tax warehousing in the UK

Transcription

1 Tax warehousing in the UK 1. Background warehousing is a regime in which excise goods are held in duty suspension, i.e. Duty has not been paid on them. No VAT is payable when excisable goods subject to a warehousing regime are placed in a tax warehouse approved for the goods. VAT (together with any suspended duty) may be due when goods are removed from the warehouse to 'home use'. Duty suspended goods that have been placed in a tax warehouse may have been produced within the EU or may be non-eu goods on which Customs Duty (but not Duty) may have been paid. goods include alcohol, tobacco products and mineral oils. goods can be transferred to and from other warehouses within the EU. Operations can be carried out on goods within the warehouse such as bottling and filtering. Movements of goods between EU Member States that have been placed in a tax warehouse from another Member State or transferred from a warehouse directly to another Member State without being brought into home use are within the Intrastat system and thus should be reported on supplementary declarations. 2. Reporting procedure

2 2.1 Differences between VAT and Intrastat declarations Due to the nature of tax warehouses there will be situations when the timings of the VAT and Intrastat declarations differ. To explain the differences we have in place a procedure which will allow businesses to account for this and explain the differences to our systems. This involves the use of Nature of Transaction codes '17' and '18' and, in certain situations, an additional simplified declaration for reconciliation purposes. In situations where an Intrastat declaration is made for the arrival of the goods, but will not be accounted for VAT purposes (for example, where the Intrastat return is made when the goods enter into the UK warehouse) the use of NoTC 17 will indicate that, although the goods are being declared for Intrastat, there will be no corresponding declaration of the goods in box 9 of the VAT return. When these goods (which have already been declared for Intrastat) are subsequently removed from the warehouse and enter into home use and are declared in box 9 of the VAT return, we recommend to explain the differences between the VAT and Intrastat declarations, you should enter the same value declared on the VAT return on an Intrastat declaration with NoTC 18 (no other data is required). This informs our systems that a value has been declared on the VAT return with no corresponding goods movement taking place. However, this procedure is not mandatory and businesses may choose not to follow this procedure, but following this procedure should reduce the number of reconciliation queries, saving both your time and ours. For more information please refer to Section 7 of Notice 60 Intrastat General Guide. The guidance contained in the rest of this Information Sheet makes reference to this procedure, but businesses may chose not to use the additional second digit indicator or make an additional simplified declaration for reconciliation purposes. Businesses not following this procedure should use NoTC 10 when the Intrastat declaration is submitted. The use of NoTC 17 can also be applied to dispatches to other Member States that are not to be included in Box 8 of the VAT return, for instance, for sales to private individuals. 2.2 Goods entering into a UK warehouse from another Member State

3 When the goods that have entered a UK warehouse from another Member State are declared for Intrastat depends on whether the goods are in retail packaging or in bulk. a. Goods in retail packaging Goods packaged for retail distribution (i.e. in packaging such as cans or bottles that can be put up for retail sale) can be reported for Intrastat either: when the goods enter the warehouse for the first time, or when the goods are removed from the warehouse into home use (i.e. Duty is paid and a VAT tax point is created). Businesses should adopt the method most suited to their trade. However, the method chosen should be used consistently. Therefore, a business choosing to report their goods when they enter the warehouse should use this method to report retail goods consignments. If the goods are reported when they enter the warehouse for the first time, we request that businesses use Nature of Transaction Code (NoTC) 17. As explained in paragraph 2.1, the use of NoTC 17 informs our systems that goods have been reported on a SD but have not been declared on the VAT return (businesses not following this procedure should declare the goods using NoTC 10). If the report is made when the goods enter into home use and a tax point is created NoTC 10 should be used. If the goods are sold whilst still in the warehouse and were not reported for Intrastat on first arrival into the warehouse, and are to remain in the warehouse, the purchaser should now report the arrival of the goods (preferably using NoTC 17, otherwise NoTC 10). To ensure that any declarations are not overlooked, we recommend that when a business intends to sell on goods (or store them for a long period of time) in the warehouse they make the Arrivals Intrastat declaration on entry into the warehouse. When goods that were initially reported using NoTC 17 are subsequently removed to home use we request that a further report on the SD should be made showing only the value (exclusive of VAT and Duty) and NoTC 18 (no other data required), at the time of removal. This informs our systems that although a value has been declared on your VAT return, no corresponding goods movement has taken place.

4 b. Bulk goods The Intrastat report must be made when the goods enter the warehouse for the first time. We request that businesses use NoTC 17 to explain that there will be no corresponding report on the VAT return, otherwise NoTC 10 should be used. When the goods subsequently enter into home use we request that a further Intrastat report should be made at the time of removal showing only the value (excluding VAT and Duty) and NoTC 18 to reconcile the difference between the VAT and Intrastat declaration. 2.3 Dispatches of goods from a UK warehouse to other Member States If goods in a UK warehouse are moved to another Member State (either directly to the customer or to a warehouse situated within that Member State) then a dispatch SD is required. Goods moved direct to customers in other Member States will require a dispatch SD using NoTC 10. If goods placed in an excise warehouse are moved directly to a warehouse in another EU Member State under Duty suspension, a dispatch declaration is required using NoTC 10. Both box 8 of the VAT return and an ESL will be required if the of goods is to a trader registered for VAT in another Member State. If the goods that are the subject of the dispatch were not reported on arrival into the warehouse, then the arrival must also now be reported (preferably using NoTC 17, otherwise NoTC 10). 2.4 Additional information Duty should always be excluded from the value reported for Intrastat. No Intrastat declaration is required if goods in one UK warehouse are transferred to another warehouse within the UK without being brought into home use. 2.5 Examples

5 The following examples provide guidance on how to report some of the most common movements of excise goods for Intrastat purposes. Whilst we can only confirm the correct treatment for Intrastat purposes, we have in addition, provided an illustration of the reporting responsibilities for VAT, EC s (ESLs) and. If you require confirmation of your VAT/ESL/ responsibilities you should, in the first instance, contact the VAT and Helpline ( ). Please also refer to Notice 197 Goods: Receipt into and removal from an excise warehouse (for further guidance on excise matters including the responsibilities of the excise warehousekeeper), Notice 702/10 Tax warehousing (for information of the VAT treatment of warehouse goods) and Notice 725 The single market (for VAT and ESL guidance). a. Retail goods Type of i. Alcoholic goods move to UK warehouse from another EU Member State (MS). Arrivals declaration required. Either on entry to the warehouse (preferably using NoTC 17 - see 2.1, otherwise NoTC 10) or on removal from the warehouse to home use (NoTC 10 with box 9 declaration). NB. The trader may choose the method which best suits his accounting practices. Declaration not required until goods are moved out of warehouse for the UK market or moved from the UK. N/A. The consignee (authorised warehousekeeper) must correctly enter goods into the excise warehouse, including the completing of certificate on electronic Accompanying Document (ead), in accordance with Notice 197 Goods.

6 Type of ii. Alcoholic goods removed from UK warehouse by original acquirer for home use. iii. Alcoholic goods moved again on ead to a warehouse in another EU MS without being removed to home use. The customer is registered for VAT in that MS. Arrivals declaration required if the goods were not reported on arrival in the warehouse, this removal to home use must be reported (NoTC 10), value as cost of goods only. If the movement was originally reported on arrival in warehouse, we request that the value and NoTC 18 (alone) should be reported on the SD so the box 9 figure does not create a discrepancy (see 2.1). Both an arrival and a dispatch are required. If the goods were not reported on arrival in the warehouse, the arrival must be reported (preferably using NoTC 17- see 2.1, otherwise NoTC 10) with a value based on the cost of goods). A dispatch must be reported using NoTC 10 (value as sale price) as there is a box 8 value on the VAT return. Accounts for acquisition tax in box 2 and 9. Yes. Please note: Value of goods must be declared in box 8 there is an acquisition tax liability in the partner Member State which would not be possible to check otherwise. N/A ESL required The warehouse keeper has a responsibility for ensuring goods are correctly removed and that Duty is correctly accounted for (see Notice 197). The consignor must complete an ead. The consignor warehouse keeper is responsible for the removal of excise goods under suspension arrangements from his warehouse. The warehouse keeper must remove the goods in accordance with Notice 197.

7 Type of iv. Alcoholic goods sold in UK warehouse by original acquirer. If no report was made on arrival in the warehouse by the original acquirer the report should be made at the time of the first sale in the warehouse by the original acquirer (preferably using NoTC 17- see 2.1, otherwise NoTC 10). Value is cost of goods on original entry into warehouse. This applies even if, following the first sale, the good are removed from one UK warehouse to another. No. N/A. If the new owner is a revenue trader and the goods are relevant excise goods (ie goods other than wine and oil), then the new owner must be registered to own excise goods under suspension arrangements in the warehouse unless that person is the authorised warehouse keeper. If the new owner is a non-uk based trader, he must have a Duty Representative in place to cover his responsibilities. b. Bulk goods. Type of i. Goods must be reported on arrival in No requirement while N/A. The consignee must complete and

8 Type of Alcohol moved to UK warehouse from another EU MS. ii. Acquirer processes alcohol, as allowed for in Notice 197 warehouse (preferably using NoTC 17 - see 2.1, otherwise NoTC 10). Goods must be reported on arrival in warehouse. If goods which are the subject of a qualifying process are subsequently dispatched to another Member State, a dispatch should be reported using NoTC 10 or 17 (see 2.1) depending on whether a declaration is made in box 8. goods remain in a duty suspensive regime. No. Once the goods have gone through an approved process they are now UK goods and not liable to acquisition VAT. UK VAT is accounted for on excise documents on removal to home use. (See Notice 197 and column). N/A return to the consignor a certificate of receipt for the goods on the ead. (Same procedures as per retail goods in 1.A). Normal excise rules apply for the movement as per Notice 197. rules regarding the processing of goods are contained in Section 11 of Notice 197. Whether or not the finished product is a new product for excise purposes, will have a baring on how VAT is accounted for see Notice 197. iii. Alcohol which has undergone a qualifying process removed from Goods should be declared on arrival in warehouse and therefore no further Intrastat action is required. As above -please refer to Notice 197. N/A As above.

9 Type of warehouse by original acquirer for home use. iv. Processed alcohol moved again on ead to a warehouse in another EU MS. The customer is registered for VAT in that EU MS. June 2012 If goods arrived in warehouse from another Member State an arrival should have been reported at the time the goods were put in warehouse. A dispatch report is required for the movement to another EU MS using NoTC 10 (value is cost of goods). Goods are now UK origin so declare value of goods in box 8. ESL required. The consignor must complete an ead. The excise process must be carried out in accordance with Notice 197. The warehouse keeper must maintain a full audit trail for the process and amend warehouse records as appropriate. The new product must be entered for removal in accordance with Notice 197 and accompanied by the ead control document.