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UKWA predicts excise upheaval if Scotland goes independent


A ‘yes’ vote in the Scottish independence referendum could have serious implications for the logistics industry, particularly excise goods, says a UK Warehousing Association expert, Alan Powell (pictured right). The excise specialist predicted

significant changes for business on both sides of the border for the control of taxes on alcohol and tobacco if Scotland and the UK were different member states. “If Scotland were to become a

separate EU Member State, the excise duty paid in England or elsewhere in the UK would not ‘count’ in Scotland. Instead, the goods would continue to bear UK duty whilst also having to have Scottish duty pre-paid prior to movement across the border.” And to prevent double taxation, there would also have to be an onerous administrative system for duty to be reimbursed. The system would apply in

reverse for goods sent from an independent Scotland to the rest of the UK and would also be resource-intensive for the revenue authorities of both member states, which in turn would lead to real risk of business snarl-ups and cash-flow jeopardy for cross-border business. “Believe me, you really do not want to be involved in this administrative and fiscal nightmare,” he said. According to Powell, the

solution would be total duty suspension, meaning excise goods remain in duty-suspension if they are intended to move (or might be moved) between the two countries.

“To do this, you would need to

apply to HMRC to be approved to deposit or store excise goods in a third party warehouse or, if the size of your business warrants it, set up a bond of your own,” Powell explains. “The total duty suspension

option also requires the Scottish side of the transaction to

be prepared to receive

those “bonded” goods. These movements have to be controlled under the Electronic Movement and Control System (EMCS) and require movement guarantees to cover the ‘risk inherent in the movement’,” he adds. Currently, large and established

alcohol excise businesses will use the tax warehousing system to move alcohol within the UK and rest of the EU but a move to an independent Scotland would lead to a dramatic increase in the number of companies using the system on both sides of the border - creating extra work, cost and risk of sanctions on businesses for even minor administrative errors. It would also mean extra difficulties for moving and releasing spirits under the “tax stamp” regime. In the case of tobacco products,

UK law currently only allows the duty-suspended receipt of tobacco products into an excise warehouse for subsequent export from the UK. Powell adds: “In the event of

‘yes’ vote, one would expect to see a proliferation of tobacco tax warehouse applications to enable tobacco products to remain in duty-suspension

for ‘export’ between the UK and Scotland. This could be of benefit in terms of cash-flow to wholesale customers of the tobacco companies, since there is no duty (or VAT on the duty) payable on the product whilst it remains in duty suspension. For Scottish Revenue, it means more compliance resources required and more revenue risk,” warns Alan Powell. On a brighter note, says Powell, independence would


eliminate the unlawful UK policy on restriction of duty suspended movements of petrol and diesel and other fuels between Scotland and the rest of the UK. This would free the PetroIneos refinery at Grangemouth to supply duty- suspended oil to valuable sites in England. In reverse, UK refiners and other businesses could look at duty-suspended possibilities in Scotland. Furthermore, an independent Scotland could make its own policy about movements of all fuel within a Single Member State to protect its fuel resilience programme and free from the dogmatic policies of HM Treasury and HMRC.”

Seko adds space as online overseas sales surge

Seko Logistics has added 152,000sq

ſt of logistics

space in Milton Keynes for its omni-channel global fulfilment services. It follows the opening of a similar size logistics centre in Northampton last year and the launch last October of a dedicated omni-channel facility in Cranbury, New Jersey, for British retail brands starting out in the US market. It will also shortly open a new centre, for cross-docking airfreight and sea freight, at

Heathrow Airport. Group managing director,

Keith O’Brien, says: “Online sales generated by UK retailers from international markets are forecast to grow sevenfold to £28 billion by 2020 and already stand at £4 billion a year. Analysis shows that international sales growth is dramatically outpacing the domestic market and will increase from its current level of 14% of total online sales to 40% over the next six years.” Since the launch of its omni- channel division, SEKO Logistics

L-R Miles O’Donnell, Andrew Baxter, Angus Hind, Karl Saunders and Rebecca Jenkinson

has seen a 40% year-on-year increase in its retail logistics business with clients such as Marks and Spencer, APAC Sale, Lulu Guinness and NPW. The new Milton Keynes

facility will employ up to 150 staff, and will also support Seko Store Development Services,

which helps expanding retail businesses to open stores faster with greater control and cost efficiency, and increases sales weeks per store in new markets. Seko Logistics has meanwhile

gained Authorised Economic Operator (AEO) status in Ireland. Its operations in the

Issue 6 2014 - Freight Business Journal

Forwarders paying the price of paper

BIFA is encouraging its members to object to a paper air waybill (AWB) surcharge that airlines are planning for export AWBs that are not filed electronically. Director general, Robert Keen, said that while the association supports e-commerce and e-AWB implementation,

“it should create value for forwarders and airlines alike, and airlines need to recognise the costs that the originator of the information incurs to enter and transmit data. “Through our international

body FIATA, BIFA will be voicing our objection to carriers that


seek to apply yet another surcharge, and create yet another revenue stream, under the guise of supporting IATA’s e-Freight initiative.” BIFA is asking its members

to join in the stand against the introduction of this surcharge by completing an online survey.

BBC star for BIFA awards

BBC Breakfast presenter Naga Munchetty is to host BIFA’s 2014 Freight Service Awards ceremony and luncheon in London on 22 January, 2015. She will present certificates and trophies to the winners of the

nine award categories. There is still time to enter, but the deadline for entering this year’s competition is 17:00 on Friday 26 September. To register, see: awardsentry.aspx

Europa splits off forwarding arm Europa Worldwide, the trailer

and freight business bought by former RH Freight boss Andrew Baxter, has split its air and sea forwarder business into a separate operating division headed by director for air, sea and logistics, Angus Hind. The move is intended to increase focus and improve the range of air and sea products. Previously, Europa’s sales and customer service teams within

its branch network dealt with all operations, including forwarding. Angus Hind joined the

company in November 2013 with a remit to develop the air and sea business, including the expansion of Europa’s Hong Kong operations. He commented: “Customers want to know that the person on the end of the phone is a specialist in their field, the old structure did not necessarily provide that. The

new structure of having an airfreight customer speaking to an airfreight specialist, a sea freight customer speaking to a sea freight specialist and a road freight specialist talking to a road freight specialist will ultimately achieve that.” The new division will have a

team of 30 office staff dedicated to air and sea business. The

centralised seafreight

operation will be based in Birmingham and airfreight in Heathrow. Shares in the air and sea business in Hong Kong, which were jointly owned with another investor, have now been bought back making the company a wholly owned subsidiary. Europa has created a new role

of national sea freight manager, bringing in Rebecca Jenkinson from Expeditors in Birmingham to head the Birmingham sea freight team. Karl Saunders

is in charge

of the team at Heathrow as national airfreight manager. In addition Miles O’Donnell has been appointed as national sales manager for air and sea.

Netherlands and Denmark are already approved, and France and Germany will be the next countries in its network to gain certification as part of the company’s target to gain AEO status in all EU countries where it operates. (See US East Coast, page 29)

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