Distance sales of duty paid alcohol direct to UK customers - Customs representation and clearance
4 Eyes Ltd is probably unique in offering a service of UK tax representative to clients selling "duty paid" wine and spirits under the distance selling rules to private customers in the UK. This service is becoming increasingly popular as alcohol sellers seek to deal directly with customers (often via the internet) and to cut-out the inventory costs and lack of flexibility and control, etc, otherwise associated with the traditional bonded warehouse or UK wholesaler model. The following explanation details this service and the steps that it entails.
Once a new client approaches us, 4 Eyes Ltd needs to put in place the relevant approvals - 4 Eyes Ltd typically advises allowing 3 to 4 months for set-up. The applications have to be completed in a certain order, and cannot usually proceed at the same time (e.g. you first require a UK VAT registration, then move to step 2, &c)
4 Eyes Ltd will act as tax representative in the UK. This means that 4 Eyes Ltd will register itself with HM Revenue & Customs ("HMRC") on behalf of its client for excise duties and then will take all necessary steps to declare and pay the duties.
Applications application processing times and other considerations
If the alcohol is excise duty paid in another EU Member State, then you will need to:
- Register for VAT in the UK
- Obtain an EORI number linked to the UK VAT registration
- Appoint 4 Eyes Ltd as your UK tax representative for distance sales to the UK
4 Eyes Ltd has its own UK duty deferment account through which the excise duty is paid (Please note that it is not permissible for your company to pay the excise duty in respect of distance sales direct to HMRC).
4 Eyes Ltd will manage UK VAT returns on your behalf. Typically, the VAT registration process takes up to a month but it sometimes takes longer. Once the VAT registration is in place, 4 Eyes Ltd will apply for electronic access in order to access and submit VAT returns online.
Application for a UK EORI number takes around 3 working days.
Once the VAT registration is in place, 4 Eyes Ltd will apply to HMRC to be appointed as your UK tax representative. This application process takes 6 to 7 weeks. As part of this, 4 Eyes Ltd will also need to increase our current duty deferment limit by an amount equal to your predicted monthly VAT and excise duty liability.
[Note that in principle any EU excise duty paid is recoverable from the relevant authorities, once they are satisfied that the goods have been delivered in the UK].
Processing for each consignment
You will send us the necessary information to complete HMRC form HM4 for each consignment, ideally as an MS Excel sheet, plus a draft invoice. 4 Eyes Ltd will verify that the data is complete and correct, then complete the form HM4 and submit this to HMRC within 24 hours of receiving the data from you. HMRC will check the form and, if satisfied, will endorse it with a unique reference number and email the endorsed form back to us. 4 Eyes Ltd will email the endorsed forms to you once 4 Eyes Ltd receives them back from HMRC. The shipping invoice sent with the goods should include the HMRC reference number (doesn't matter if it is handwritten or printed on the invoice, but note that this is in addition to the invoice number).
Note: HMRC will process forms only during office hours on normal working days, not public holidays and weekends, and 4 Eyes Ltd will process the forms within 24 hours of receipt. You will appreciate that this means that it the shipment of the goods can only occur after 3 to 7 days after you send us the shipment information and 4 Eyes Ltd has received the data, provided that the information received is complete and correct.
At the end of each month a summary Form HM10 for tax representatives is submitted detailing the excise duty payable in respect of shipments effected in the month. Nil returns are required.
On a quarterly basis, 4 Eyes Ltd will submit to HMRC the VAT return to account for the UK VAT element on your sales.
The following data must be provided for every shipment in order to complete the form HM4:
- Type of goods (e.g. Wine, Sparkling Wine)
- Brand name
- Alcohol strength (%/vol) for each brand
- Quantity (Litres) for each brand
- Transporter name and vehicle number (if known) for the consignment. if you don't know the transporter details when the order is created, you will need to forward this information to us once you have arranged the transport as HMRC require to know this.
- Date of dispatch AND intended date of arrival
4 Eyes Ltd would also need to see the draft shipment invoices in order to verify that all the goods to be shipped are included in the HM4.