French Excise Duty - Help Please!

French Excise Duty - Help Please!

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Can anyone help with re-claiming French Excise Duty? Scenario is this:

Client is purchasing bottled wine from VAT registered supplier based in France and arranging for wine to be bought into UK (via registered consignee transportation business) for resale in the UK. Excise duty is therefore being incurred twice (when the wine is bottled, French duty paid, when bought into UK, UK duty paid).

Can anyone recommend an accountant company who will be able to help with reclaiming the French duty paid?

Replies (9)

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By palcouk
30th Aug 2014 13:21

Vat - EU supply

If the client had provided their GB vat # no vat should have been incurred at the point of EU Sale.

How much EU Vat has been incurred?

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Replying to Accountant A:
Johny Fartpants Picture
By johnny fartpants
30th Aug 2014 22:05

Duty - Not VAT

Hi palcouk. You are correct, no VAT is charged. My client is looking to recover French duty. Not French VAT. 

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Woolpit Gus
By nutwood
31st Aug 2014 07:24

Has French duty been paid?

Does your client know for certain that French Duty has been paid?

It's a long time since I had direct experience of this but in those days the wine would be held in France under some form of duty suspension.  If it was released for sale in France then French duty would be paid.  If it was exported to UK for delivery to end user or wholesaler or retailer without a 'bonded facility' UK duty would be paid.  If it was to be delivered to a UK 'bonded facility' the duty would only be payable when removed from there for sale in the UK.

If the wine your client is buying has suffered duty in France because it was released for sale in France, I do not believe there is any way in which the French duty can be recovered if it is subsequently exported.

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Replying to comsci:
Johny Fartpants Picture
By johnny fartpants
31st Aug 2014 11:43

As I understand it

 

Hi Nutwood. Thanks for your message.

As I understand it, the duty is paid when the bottle is corked (on the assumption it will be sold in France). It is then transported from vineyard (in France) to my client (in UK).

The relevant issues are

(1) the wine is never sold for consumption in France therefore French duty should not be paid and

(2) as this is purchased as bottled wine, duty has already been paid at the bottling part of the process.

I believe that the French duty is reclaimable as long as we can demonstrate proof of removal. This is the part we need help with.

More information (in case this is relevant): The French vineyard and the UK seller are related parties. All wine is to be bought from the same vineyard. UK seller has exclusive rights to sell the whole of the vineyard’s produce so potentially quite a significant volume concerned here.  

What I need is someone who can deal with the French authorities to either find a way of not incurring French duty in the first place or to find a way to reclaim the French duty.

Needless to say, the vineyard is well established but under new ownership. The new owner’s first harvest was last year. This is the first time sales have been exported in large volumes. I am happy dealing with the UK side of things but am out of my depth with the French stuff.

I know this site has a massive wealth of knowledge. Hopefully someone out there can help.

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Woolpit Gus
By nutwood
01st Sep 2014 08:44

Have you tried WSTA?

At today's rates the French duty on a bottle of wine is about 2p (UK duty is £2.04) and was probably less back in the day.  My clients were importing fine wines and selling direct to consumers and, given the healthy profit margins, I suspect may have just suffered the French duty.

I would have thought that the best source of advice would be the trade - try the Wine and Spirit Trade Association http://www.wsta.co.uk/about-us/about-us

 

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By Malcolm McFarlin
01st Sep 2014 08:57

Registered Consignee

Hi

Nutwood is correct the goods are held in duty suspension. The French vineyard should not be paying excise duty at the bottling part of the process and will need to consult with the French tax authorities to have his duty status amended -I'm afraid I can't help you there.

I am a bit confused by your comment 'via registered consignee transportation business' since I am not sure if such a business activity is legal. You client is required to register with HMRC in the UK as a Registered Consignee [Public Notice 203A refers]. Registered Consignees ('RC') are revenue traders who are approved and registered with HMRC to receive and account for the duty on duty-suspended excise goods from other Member States. RC's must account for  the duty when the goods are received in the UK which is usually done by setting up a duty deferment account. RC's cannot hold or dispatch goods under duty-suspension arrangements. Only Registered Consignors approved in other Member States may consign duty suspended goods to RCs. It would seem that your client will have to register with the French Tax Authorities to gain such approval.

To become a RC in the UK you must have a UK VAT number and duty is accounted for under EMCS which is the electronic system for recording and validating all movements of duty suspended goods. The only exception to using EMCS is for small wine producers who are exempt. In this case the movement should be accompanied by a document drawn up by the small wine producer in accordance with EU Commission Regulation 436/2009.

I don't think your comment about claiming duty back from the French tax Authorities applies

Malcolm McFarlin

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By shaun king
01st Sep 2014 09:47

French Excise Duty

the problem here arises in the fact the producer is selling Duty paid wine rather than entering the goods to Duty suspension so as they can move from France to the UK without payment of VAT and Excise Duty.

if you want to PM me details I will speak with my French firm who specialise in Indirect Tax matters

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Johny Fartpants Picture
By johnny fartpants
01st Sep 2014 11:59

Confused

Thanks for your comments thus far.

Malcolm, I am a bit confused. The wine is to be collected from France, taken through UK customs (where UK duty will be paid) and delivered to UK storage area by a third party transport company (un-related to my client’s business). It is they, not my client, who is the registered consignee. They have said that all they require to do this is an Export Accompanying Document (EAD) issued by the French vineyard. The transport company will use their own duty deferment account to get the goods through customs (and charge my client for doing so).

Are you saying there is a problem with this arrangement?

Shaun, thanks, this sounds ideal.

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By Malcolm McFarlin
02nd Sep 2014 10:37

Commercial Importers & Tax Representatives.

Johnny

What your client is undertaking was the old 'REDS' system which was replaced by Commercial Importers & Tax Representatives on 1/04/2010 which is bringing in duty-paid stock from another Member State.  You will find the HMRC Public Notice 204B helpful.

The transport company will be a 'Registered Commercial Importer' not a Registered Consignee. A RIC is someone able to import goods into the UK that are already duty paid in another Member State and defer payment of the duty using their own or someone  else's duty deferment account. Under this arrangement the duty is guaranteed by the duty deferment guarantee. I assume your transport company will therefore make all the necessary arrangements to clear the goods on entry to the UK.

To go back to your original question I don't think you are suffering a burden of additional duty since it would be the same as a day tripper going to Calais, buying French duty paid alcohol and then expecting HMRC to refund the French Duty on entry to the UK.

Your client could register his own business as a Registered Commercial Importer but would have to set up a duty deferment account if he wished to defer the duty.

The only was of importing the goods 'duty suspended' would be as I described in my earlier note.

Malcolm McFarlin

www.mandrtaxadvisers.com 

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