Navigating the world of customs regulations can be complex, especially when dealing with "bonded" warehouses authorized by HM Revenue & Customs. Misunderstandings can lead to incorrect customs declarations, non-compliance issues, and potential tax liabilities for traders and their agents.
What is a Bonded Warehouse?
A bonded warehouse is a site where shippers can store imported goods before customs processing. Goods in bonded warehouses are exempt from customs duties until delivered to their destination, at which point applicable duties become payable. There are two types: wet (for alcohol and tobacco) and dry (for most other goods). Key Benefits of Bonded Warehouses:
Deferred or avoided duty and tax payments, offering cash flow efficiencies and cost savings of 25-30%.
Long-term storage options up to five years, accommodating import licensing requirements or fluctuating demand.
Improved customer service through advanced ordering and closer storage proximity.
Preserved product quality with specialized facilities for various goods.
Enhanced safety and security measures, documented goods, and regular audits.
Proximity to ports reducing lead time, transport costs, and potential damage
In this brief guide, we will provide a clear explanation of the differences between two types of warehouses: Customs Warehouse and Excise Warehouse. Before diving into that, let's first understand the contrast between goods not in free circulation and excise goods.
T1 and T2 Goods:
T1 goods (Not in Free Circulation) lack paid import duties and taxes, remaining under customs control until settled. T2 goods (Free Circulation) have cleared customs with all duties, including excise duties, duly paid, allowing unrestricted trading within the UK.
Excise goods
Excise goods are those with paid import duties but outstanding excise duties. Though these goods are in free circulation from customs clearance, they remain under control until excise duties are settled.
Customs Warehouse
Authorised for storing goods "Not in Free Circulation," a customs warehouse suspends import duties, excise duties, and VAT. These payments become due upon removal to free circulation (home use). The warehouse keeper's guarantee covers both storage and port/airport movements.
Excise Warehouse
An excise warehouse, or tax warehouse, solely stores excise goods in free circulation. These goods have paid import duties. VAT and excise duties are suspended within the warehouse, and its keeper's guarantee covers storage only.
Excise warehouse movements require an EMCS excise movement guarantee. Registered users, usually excise traders at export and customs brokers at import, generate an Administrative Reference Code (ARC) for goods movement.
Compliance and Procedures
Traders must adhere to specific procedures for customs and excise goods. Correct customs warehouse identification is crucial for accurate declarations. Proper documentation and EMCS adherence ensure successful goods movement.
Conclusion
Understanding Customs and Excise Warehouse differences and procedures ensures compliance and mitigates liabilities. By following regulations and utilising EMCS, traders and agents navigate processes efficiently and confidently.
Are you thinking of opening a Customs Warehouse and need assistance with the application process?
Are you struggling to find a dedicated customs agent to clear your import and export customs entries?
Or perhaps you're looking for a specific customs training course for your staff?
Our Customs Special Procedures training course includes comprehensive coverage of Customs Warehousing, specifically designed to assist companies in minimising additional import duties. For more information, please click here or email us at exportbritain@gmchamber.co.uk . Our award-winning team is dedicated to providing expert customs advice and recommending the best training courses for your staff.
Greater Manchester Chamber of Commerce is your expert customs agent in Manchester, providing direct links to all sea, air, rail, and road ports, catering to importers and exporters of all sizes and sectors. Let GM Chamber handle the complexities of exporting and importing goods, allowing you to focus on keeping your business thriving. For more information on the above services, please email chambercustoms@gmchamber.co.uk
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