EXCISE

A GUIDE TO CUSTOMS CLEARANCE AND EXCISE

Excise duty is an indirect tax that is often charged on a specific unit, such as a litre or kg, rather than the customs value.

Industrial government policies establish what will be prescribed for excise, which is often used as a taxation system to influence the consumption of certain goods, and achieve desired policy outcomes.

Excise duty is also a hypothecated tax, where public funds are collected on behalf of a specific cause. The proceeds of excise duty are directed to the consequences of excise consumption, for example tobacco excise is used to treat tobacco-related health issues in public funded hospitals, and establish tobacco related public heath campaigns.

Fuel duties are used to create roads and highways, and develop new technologies for non-polluting fuels. Alcohol excise duty is directed to treat the consequences of alcohol-related illnesses.

Excise duty in the UK is chargeable, in addition to any customs duty which may be due, on the goods described as follows:

  • Wine and made-wine

  • Beer

  • Cider and perry

  • Spirits

  • Low alcohol beverages

  • Imported composite goods containing alcohol

  • Tobacco products

  • Hydrocarbon oil

  • Climate change levy

  • Biofuels

This is established by confirming the commodity code of the goods, and the tax type code, which will be used to determine the type and rate of excise duty payment.

If goods are released into free circulation, the rate of duty must be manually calculated, according to quantities and values involved in the transaction detailed on the commercial invoice and/or packing list, by the customs agent, and submitted to HMRC on the C88 (SAD) customs declaration.

HELPFUL LINKS

Visit: UK Trade Tariff

Tax type codes and rate of tariff: UK Trade Tariff: excise duties, reliefs, drawbacks and allowances

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