The annual tax revenues due on excise duty are staggering. During 2021/22, over £23bn was raised in tobacco and alcohol duties, which forms a large part of what’s classified as excise duty. Of this, £10bn was raised by tobacco duty alone, whereas alcohol duty raked in £13bn. This alcohol duty can be broken down further, with cider bringing in £234m, beer £3.7bn, spirits £4.4bn, and wine £4.7bn. To put that into perspective, for the same period of 2021/22, the entire amount raised from customs duty amounted to a little under £5bn.
As you can appreciate, there is a colossal amount of money liable every year from the production and sale of alcoholic beverages, and it’s because of this that it makes perfect sense to manage that huge responsibility with a comprehensive excise duty management system (DMS).
Our product, DMS Excise, can be used to effectively manage duty-suspended goods (bottled/kegged alcoholic beverages or tobacco products) in a bonded warehouse. Here are five substantial benefits of using an excise DMS:
1) Automatically generate W5Ds, W6Ds, and W1s
Manually preparing accurate W5D, W6D, and W1 returns can be time consuming and expensive. With DMS Excise, all of the information required to produce these returns is automatically logged behind the scenes throughout your use of the DMS. Only when they are required will all of this information be pooled together to create your warrants with a click of a button.
2) Cashflow, cashflow, cashflow
With a bonded warehouse and the use of a DMS, you can benefit from holding duty-suspended stock in your warehouse until you need it. Only once the stock needs to leave the warehouse will you have to account for the duty and VAT, which DMS Excise will automatically track for you.
3) Tighter stock control and compliance
DMS Excise should always be driven by a commercial system (WMS, ERP, etc.). When receiving stock into the warehouse, the goods can be put away into the racking and configured to be placed ‘on hold’. This means that commercially, no one can yet request to pick or remove that stock before it has been fully processed in the DMS and confirmed as available. Similarly, for removals from the warehouse, DMS Excise automatically generates ‘release’ messages to confirm when stock has been written off the DMS stock balances, along with confirmation of any duty liable. This gives much greater control and transparency over the stock, reinforcing the high degree of compliance required by HMRC.
Furthermore, without a DMS, you’re fully relying on your commercial system being wholly accurate in its stock balances. With integrated DMS Excise software, the commercial system can send a daily stock reconciliation file containing a complete list of bonded stocks and balances. The DMS will then compare those commercial balances with its own balances and automatically flag any discrepancies.
4) Built-in EMCS connectivity
DMS Excise not only tracks all duty-suspended liabilities, but it is also a one-stop shop for all duty-suspended movements. The DMS has both inbound and outbound EMCS connectivity built-in, meaning inbound IE801 messages can be received, IE818 Report of Receipts can be submitted, and IE815 outbound EMCS messages can be created. The EMCS functionality caters for all message types and puts you in control of your duty-suspended movements without having to consult the Government Gateway portal.
5) One place for both customs and excise duty suspension
An excise DMS doesn’t just mean you can only store excise bonded stock. Provided your warehouse authorisation covers both customs and excise suspension. DMS Excise can flexibly cater for both. This allows for an all-in-one DMS solution which will track all liable excise and customs duties.
Connor Hainey – Product Owner