Excise duties (often known as 'sin taxes') include excise duty on alcohol, tobacco products and oils. There are also several gambling duties.
For most businesses, excise duty is just a part of the fuel bills they pay. But if you are involved in producing, selling, importing or exporting excise goods or services you need to understand more about how excise duties affect your business.
Varying rates of excise duty apply to different types of alcohol, most tobacco products (excluding snuff) and motor and heating fuel.
You may be able to claim alcohol tax relief if you use alcoholic products in other products (eg confectionery) or manufacturing processes. There are also lower ‘rebated’ rates of fuel tax for oil used off-road (eg by farmers) and other qualifying uses.
A range of separate excise duties apply to different forms of gambling and gaming. These include amusement arcade machines, bingo, bookmakers and casinos.
Excise duty is normally payable when goods subject to excise duty are produced or imported into the EU. Excise duty can be suspended by storing the goods in approved excise warehouses; the excise duty becomes payable when the goods are released to be consumed. Excise goods that are exported may be eligible for drawback, which is repayment of excise duty you have already been paid.
HM Revenue & Customs (HMRC) refers to businesses involved with goods or services liable to excise duty as 'revenue traders'.
Revenue traders must always be registered with HMRC. As well as the normal business records, revenue traders must keep records and use HMRC software to show excise duty has been properly accounted for.
The excise duty records you need to keep depend on what your business does. If you are responsible for paying excise duty (eg as a producer of goods subject to excise duty), you must keep an excise duty account and submit excise duty returns. Businesses that deal in excise goods must keep records of any duty deferment accounts and dealings in duty-suspended goods.
Procedures for dealing with excise goods can be complex. For example, there are a number of different procedures you can use to import excise goods. You may want to take advice on the best options for your circumstances.