HMRC Notice 197 governs duty-suspended excise movements in the United Kingdom.

Scope of the notice and use of EMCS

HMRC Notice 197 sets out the general conditions governing the holding, receipt, dispatch and removal of duty-suspended excise goods from UK excise warehouses . It covers alcoholic products, tobacco products and vaping products held or moved under this arrangement, including where they are stored in approved premises .

The document covers, in particular, the entry of goods under duty suspension into an excise warehouse, movements from the place of release for free circulation to a warehouse or another permitted destination, releases for consumption with duty paid, dispatches between authorised persons or premises, and exports . It also refers to the specific rules for Northern Ireland concerning the holding, movement and payment of excise duty .

Movements recorded in EMCS

According to HMRC, the Excise Movement and Control System, or EMCS, is the electronic system that records and validates movements of duty-suspended excise goods . The UK version of the system continues to record such movements in the United Kingdom, but is no longer connected to the European Union's EMCS system, except for Northern Ireland .

Since 13 February 2023, EMCS has also covered business-to-business movements of duty-paid excise goods between Northern Ireland and the European Union . The notice states that these movements are dispatched by a certified consignor and received by a certified consignee, both authorised by the competent authorities in their respective country .

For duty-suspended movements, EMCS applies in particular to alcoholic products, tobacco and vaping products moving between UK excise warehouses, movements from a UK warehouse to the point of exit from the territory, and flows between Northern Ireland and a Member State involving authorised persons or premises . Authorised warehousekeepers and registered consignors moving goods under duty suspension must register and enrol in EMCS .

The consignor submits an electronic administrative document, or eAD, in EMCS before the goods depart . Once the eAD information has been validated, the system assigns the movement a unique administrative reference code, or ARC . Depending on whether the movement begins in Northern Ireland or the rest of the United Kingdom, the ARC starts with "XI" or "GB" respectively .

The notice provides exceptions to the use of EMCS where the system is unavailable and fallback procedures apply, and for movements meeting the criteria for simplified procedures . Domestic movements of duty-suspended energy products between two authorised premises located wholly within the United Kingdom, or from authorised premises to a point of exit from the territory, do not fall within EMCS and must be accompanied by form W8 or an equivalent commercial document .

Movement guarantees and rules for Northern Ireland

Notice 197 defines a movement guarantee as financial security taken out with a bank or other approved financial institution, intended to cover revenue at risk during the transport of duty-suspended excise goods . It identifies the guarantee provider as liable for duty where an irregularity occurs, or is deemed to occur, during a covered movement .

The guarantee normally covers duty-suspended movements initiated by an authorised warehousekeeper from its excise warehouse or by a registered consignor from the place of release for free circulation . The notice provides exceptions for bulk fuels carried by sea or pipeline, and for certain movements between two UK excise warehouses . HMRC may require a guarantee for these movements where it considers this necessary to protect potential revenue .

The amount is calculated by reference to the duty suspended over an average week of movements, based on the preceding 12 months and taking account of seasonal variations . For a new business, HMRC uses the forecast amount of duty suspended over an average week . The usual minimum is set at £20,000 .

• For average weekly exposure below £1 million, the normal amount represents 25% of potential duty .
• Between £1 million and less than £25 million, the normal amount is set at £250,000 .
• Between £25 million and less than £100 million, the normal amount represents 1% of potential duty; from £100 million, it is £1 million .

For Northern Ireland, excise goods may move under duty suspension with Member States through EMCS and an excise identifier beginning with "XI" . The notice lists, in particular, the following destinations: an excise warehouse in the United Kingdom or a Member State, a registered or temporarily registered consignee, a direct delivery place, an exempt consignee, a place of exit from the Union, or an unknown destination for certain energy products transported by sea or inland waterways .

The notice refers to Directive (EU) 2020/262 and Commission Delegated Regulation (EU) 2022/1636 for the conditions applying to movements of excise goods between Northern Ireland and Member States . Vaping products are subject to separate rules, as the European Union does not recognise them as excise goods . For movements between Northern Ireland and a Member State, the notice provides for the use of substitute identifiers in certain EMCS fields and the preparation of a separate electronic administrative document for vaping products .