Keeping records for an excise warehouse
Find out what records you need to keep as an excise warehousekeeper.
To be authorised as a warehousekeeper you must demonstrate that your records are adequate for revenue purposes. All of the information you keep should be permanent and legible. Your records must show details of all excise goods received, stored in and removed from the excise warehouse.
You must also register for access to the Excise Movement and Control System (EMCS) for dispatching and receiving goods.
Full details of the procedures for receiving and dispatching excise goods in duty suspension under EMCS are contained in Excise Notice 197.
If you trade in goods or services that have to pay Excise Duty, you should read the guidance about records you should keep in Excise Notice 206.
Find out about applying for authorisation as an excise warehousekeeper.
Manual records
You can use manual records. However, if you use loose-leaf stock records you must serially number the pages.
As a minimum, your records must show:
- a full description of the goods, including age and date of first warehousing for spirits
- the current location of goods in the warehouse
- the duty status of the goods, and evidence of any duties paid
- the name, address and, if appropriate, the VAT registration number of:
- the owner
- the duty representative
- whether the goods have been subject to a supply in warehouse
- a means of identifying all goods to their stock number or vice versa
Additional record keeping requirements for certain trade facility warehouses may be required.
Records on microfilm
Records can be kept on microfilm or microfiche, provided that legible copies can be produced and there are facilities to let us look at them when required.
Electronic records
If you use online stock control and accounting you should let us have information about the software you intend to use when you apply to be an excise warehousekeeper. Records stored on your computer must be the same standards as those required if you were using manual records.
If you want to use computer versions of official forms, include copies of these forms with your application so that we can make sure they meet our requirements.
HMRC does not endorse any specific software package. Software packages which are used in one warehouse may not be appropriate for use in another.
Access we require
When considering granting approval to use your specified software package we need:
- right of access to your computer systems and the data and documentation, including financial and management systems
- the facility to download data for any checks and audit work that we may carry out off-site
- you to provide any necessary assistance to our officers whilst carrying out audits of your systems
- you to include the software package in your annual audit and make sure the auditor’s report is available to us
- you to have adequate back up in place, with fallback and disaster recovery systems
- advance notice from you of any proposed changes to the software package - you cannot introduce any changes that may affect the system’s ability to account for the excise goods without our approval
You must make sure that safeguards exist to protect your system from unintentional corruption. If necessary, we’ll ask you to:
- provide a terminal for official use, which is capable only of printing, reading files and displaying information on the computer
- allocate a unique password to our officers which will allow us to access the files on a ‘read only’ basis
- maintain a record of changes to programmes
- prevent unauthorised access to data
Stock marking and control
You must mark all excise goods, so that you can identify them in your stock accounts.
Excise goods must have clear and tamper-proof markings at all times whilst in your excise warehouse, from arrival to removal from the duty-suspension system. You may use any system which meets this requirement, for example, bar coding, providing that you can establish an audit trail.
A stock account must show :
- a commercial description of the product - for example, Old St Andrews Golf Ball Miniatures
- the quantity received - in litres for all goods other than spirits which should be in litres of alcohol
- the alcoholic strength of the product
- the quantity received in cases, casks, polydrums or other containers
- a unique identifying reference number
- the date received
- the owner of the goods
You must make sure that:
- your stock records accurately record any change of ownership
- all owners of relevant goods are registered with HMRC and the date that you examined either:
- their registered owner’s certificate
- the duty representative’s certificate
- full details of owners and duty representatives are available to us
You should keep all excise goods in clearly identified locations so that you can readily trace them to the stock account. You must note the appropriate stock account whenever you move excise goods to a new location in the excise warehouse.
You must check the accuracy of your stock by undertaking a satisfactory inventory-checking system as agreed with us and by complete stocktaking at reasonable intervals.
You must take stock of all excise goods in the excise warehouse:
- monthly in the case of bulk goods in vats or in storage tanks
- annually in the case of all other excise goods
We may ask you to produce all stocktaking records and working papers. If you do not carry out stock control measures, we may restrict or even cancel your excise warehouse approval.
We may ask you to carry out a stocktake if there is reasonable cause to do so. In these circumstances we will give you written instructions.
Care and control
As an authorised warehousekeeper, you are responsible for the care and control of the goods in your approved sites. You must take all necessary steps to control and safeguard your stocks and investigate and examine critically all losses and deficiencies.
You must:
- record losses and the results of your investigations into them, including any management decisions taken
- take prompt remedial action
- report losses or deficiencies in line with arrangements agreed with us
- note the loss in the stock account
If you do not report notifiable losses immediately, this is a serious breach of your conditions of approval, and could lead to your approval being cancelled.
Duties will be charged on losses and deficiencies of excise goods in your warehouse, unless you can show that they are due to natural causes or accident. Normally, we will issue an assessment to the warehousekeeper for any duty due.
You can request off-setting only if you can demonstrate that stock losses and stock surpluses are related, for example, the product is similar but stock rotations differ. Your records and accounts must contain a clear audit trail to justify any adjustments of stock records after discovering any errors. You must also be able to justify each offset. We do not allow you to accumulate losses and surpluses from various sources and then offset gross totals against each other.
If at any time you find you have a discrepancy in your stock you must immediately contact the Excise Helpline.
It is a serious offence to conceal any deficiency, surplus or other discrepancy.
Operations in warehouses
Operators of motor and heating fuel warehouses should also refer to Motor and heating fuels general information and accounting for Excise Duty and VAT (Excise Notice 179).
You must take and record accounts immediately before and after each operation. You should also keep an accurate record of any cleaning agent used and advise HMRC about any gains and losses from any operation in warehouse.
In addition you must make sure that you:
- carry out and record details of checks you carried out on the fill measures and tests of strength
- check that you have drained all empty casks or other containers of bulk alcoholic liquids
- remove the empty casks promptly from the warehouse
- measure the alcoholic strength of contaminated agent before you allocate a stock account number
- measure the volume of cleaning agent used before and on completion of the operation when rinsing casks
You may mix goods of different descriptions in one case if you make sure that your accounting system lets you account accurately and satisfactorily for the goods concerned. In particular, you must use the correct tax type and duty rate for each of the products in the mixed case whenever you pay duty. Contact HMRC if you have any doubts about the adequacy of your proposed system.
For all operations you must:
- record details of any mechanical breakdowns where losses have happened
- make sure that you take account of and keep secure all remnants from any operation
- keep a separate record of losses, by type, to establish loss patterns
- investigate and record the reasons for any losses or gains outside your established loss patterns
- make sure that all empty packages not intended for immediate reuse are removed from the warehouse or placed in packaging materials compartments without delay
- denature or destroy used pads following filtration or other operations
- bring into warehouse only empty packages and quantities of packing materials required for immediate use - you must remove or destroy any previous identifying marks
For each bottling operation you must:
- take account prior to bottling
- take and record bottle measurements of strength and liquid content
- carry out filling adjustments to make sure that the intended strength and quantity are achieved in practice
- allocate an identifying stock number to filled cases
- balance the operation account
- investigate any losses outside established loss patterns
- investigate all gains during the operation
- complete a declaration of outturn - if more than one size of bottle is to be filled, record the number of cases of each size
- secure any remnant
- complete your stock accounts
- keep a copy of the bottle label used
- make sure you keep a record if you use duty-free spirit for rinsing
Your production records of the strength of bottled excise goods and quantity, in each case, should agree with the strength and quantity shown on the bottle labels.
Gains and losses during operations
It’s accepted there will be gains or losses from any operation carried out in a warehouse. However we do not set tolerances or ‘allowable losses’.
It’s a warehousekeeper’s responsibility to maintain tight controls on all operations and record any resultant gains or losses.
Any gain resulting from the operation must immediately be added into the appropriate stock account. Any loss should be recorded and investigated. You’ll need to demonstrate that any loss is within your business’s established parameters, taking into account the type of operation, product, machinery, temperature, and so on.
If you fail to do this, or your explanation is not accepted by us we may ask you to account for the excise duty.