Storing, processing or producing excise goods in a UK Freeport customs site
Source: gov.uk (2025-11-18)

Find out who can be authorised to store, process or produce excise goods in a UK Freeport customs site and how to apply to do so.

Where we refer to a ‘Freeport’ on this page, this also applies to ‘Green Freeports in Scotland’ unless otherwise stated.

Overview

This guidance explains who can operate in excise goods in a Freeport customs site (also known as a ‘free zone’) and what you must do. You should read it if you:
- want to import, export, produce, handle, store, process, package, transport or deal in excise goods in a Freeport customs site
- want to be authorised as a Freeport excise business (also known as a ‘free zone excise business’) and approved to operate a Freeport excise warehouse (also known as a ‘free zone excise warehouse’)
A ‘free zone’ means an area in the UK designated as a special area for customs purposes under section 100A of the Customs and Excise Management Act 1979.

HMRC can choose whether to:
- allow an existing authorisation or approval to continue
- approve and register new Freeport excise businesses and premises
- approve new and additional premises
You may get a penalty if you do not apply for authorisation or approval at the correct time.

HMRC will always:
- review the compliance of existing authorised Freeport excise businesses
- check all new applications
Who can be authorised as a Freeport excise business to operate a Freeport excise warehouse

An authorised Freeport excise business is approved to operate a Freeport excise warehouse to either:
- declare goods to a Freeport procedure (also known as a ‘free zone procedure’)
- carry out a Freeport activity (also known as a ‘free zone activity’)
An authorised Freeport excise business means a business which is authorised as a ‘free zone’ business who is also approved to operate a free zone excise warehouse in accordance with regulation 85C of the Excise Goods (Holding, Movement and Duty Point) Regulations 2010. A free zone procedure means a storage procedure described in paragraph 2(1)(b) of Schedule 2 to the Taxation (Cross-border Trade) Act 2018.

A Freeport excise warehouse is a place of security for the deposit, keeping and securing of excise goods in a Freeport procedure.

A Freeport activity is an activity that falls within the description in regulation 3(2)(c) of the Customs (Special Procedures and Outward Processing) (EU Exit) Regulations 2018.

Applying to be authorised as a Freeport excise business to operate a Freeport excise warehouse

You must apply to use the Freeport customs special procedure (https://www.gov.uk/guidance/apply-to-use-the-freeport-customs-special-procedure). The application form must be completed and signed by a responsible person within the business. This will either be:
- the sole proprietor of the business
- one of the partners if the business is a partnership
- a director or the company secretary or an authorised signatory if the business corporate body
As part of your application you must include:
- copies of drawings or plans showing details of the proposed warehouse area seeking approval
- a copy (or a summary) of your premises’ health and safety risk assessment
- any other information that we may request (for example, business plans)
Your application will be considered and we will carry out background checks. If these checks are not enough for us to decide, we might ask for more information. Your application will be on hold until this information is received.

You may receive a pre-approval visit for us to get information to help in processing the application.

During any visits to your premises, we will examine all the business’s activities and may ask about your:
- suppliers
- customers
- business plans
- accounting systems
- premises
- financial viability
- other relevant matters
An important part of the application process is the fit and proper test.

You’ll need to prove you are fit and proper to carry on excise activities within the Freeport to be granted approval. Read more about the excise fit and proper tests in Excise Notice 196 (https://www.gov.uk/guidance/registration-and-approval-of-excise-goods-held-in-duty-suspension-excise-notice-196#sect3-2).

For HMRC to consider approving your Freeport excise warehouse you must:
- show a genuine need for Freeport excise warehouse storage facilities in the area
- provide a guarantee (if we decide one is needed)
- make sure that the premises are secure
- make sure that the premises allow HMRC safe access to all approved areas and duty-suspended stock
- make sure that your systems allow us to carry out an audit and any other checks
- meet all the conditions set out in this guidance
- meet any other conditions which we may impose on your approval
When we authorise you, you’ll get a letter that sets out the authorisation conditions and what you need to do next.

Your obligations as a Freeport excise business to operate a Freeport excise warehouse

Before you accept goods into your warehouse you must make sure that if you are dealing with alcoholic products you need to carry out due diligence on your supply chains to ensure goods are legitimately sourced.

Carrying out due diligence

Due diligence is the care a company applies when:
- starting business relations or contracts with other companies
- responding to trading risks identified
Without due diligence, there are risks across supply chains of becoming implicated in illicit trading.

Doing so will help to:
- prevent illicit trading in alcohol supply chains
- reduce the risk to businesses of financial liabilities on goods with which duty has not been paid
Due diligence is a condition of your approval. Read more about due diligence in Excise Notice 196 (https://www.gov.uk/guidance/registration-and-approval-of-excise-goods-held-in-duty-suspension-excise-notice-196#sect10).

Keeping records

As part of the procedure for authorising you as a Freeport excise business, you must prove that you can keep commercial records.

Your records must show details of all excise goods received, stored, processed and removed from your premises.

Electronic records

If you keep digital records (for example, online), you should tell us about the software you plan to use when you apply to be a Freeport excise business.

HMRC does not endorse any specific software package. Software packages which are used in one warehouse may not be appropriate for use in another.

Access we require

When considering granting approval to use your specified software package we need:
- right of access to your computer systems and the data and documentation, including financial and management systems
- the facility to download data for any checks and audit work that we may carry out off-site
- you to provide any necessary assistance to our officers whilst carrying out audits of your systems
- you to have adequate back up in place, with fallback and disaster recovery systems
- advance notice from you of any proposed changes to the software package — you cannot introduce any changes that may affect the system’s ability to account for the excise goods without our approval
You must make sure that safeguards exist to protect your system from unintentional corruption. If necessary, we’ll ask you to:
- provide a terminal for official use, which is capable only of printing, reading files and displaying information on the computer
- allocate a unique password to our officers which will allow us to access the files on a ‘read only’ basis
- maintain a record of changes to programmes
- prevent unauthorised access to data
Marking and controlling your stock

Whilst operating a Freeport excise warehouse you must mark all excise goods, so that you can easily identify them in your stock accounts. They must always have clear and tamper-proof markings, from arrival to removal.

You should keep all excise goods in identified locations so that you can trace them to the stock account. You must note the appropriate stock account whenever you move excise goods to a new location in the Freeport excise warehouse.

You may use any system to meet these requirements (for example, barcoding), providing that you can establish an audit trail.

A stock account must show:
- a commercial description of the product and quantity of product received (for alcoholic product, this should be in litres of pure alcohol)
- the alcoholic strength of the product
- the quantity received in cases, casks or polydrums
- a unique identifying reference number
- the date received
- the owner of the goods
You must also make sure that:
- your stock records accurately record any change of ownership
- full details of owners are available to us
Storing excise goods with different duty status on a single approved site

Under certain conditions, we will allow you to store excise goods with different duty status on a single approved site. This is known as ‘co-storage’.

You may store goods:
- that are liable to excise duty which are suspended under the Freeport special procedure
- on which excise duty and any other duties have been paid (in other words UK duty-paid goods)
When you apply to use the Freeport customs special procedure (https://www.gov.uk/guidance/apply-to-use-the-freeport-customs-special-procedure), you must tell us if you wish to store duty paid or non-excisable goods.

You must satisfy HMRC that your accounting system is capable of:
- identifying and recording the location and duty status of all the excise goods
- running the various accounting routines for all classes of excise goods
- showing clearly when duty becomes due
Your system must be robust enough to make sure the correct duty status is shown at all times. For example, duty suspended goods must not be shown as duty paid without prior payment of duty.

Permitted operations in a Freeport warehouse

You may carry out operations on your goods as long as HMRC has:
- approved you to receive and store excise goods in bulk
- not specifically restricted your authorisation by imposing any conditions or restrictions.
You must list all operations you wish to carry out on your application.

HMRC can impose conditions or restrictions on operations you perform to reduce the risk of duty not paid.

Records you must keep for operations performed

When carrying out any operation in a Freeport excise warehouse on duty-suspended goods, you must keep accurate records.

You must:
- take and record your accounts immediately before and after each operation
- keep an accurate record of any cleaning agent used
- tell HMRC about any gains and losses from any operation
You may mix goods of different descriptions in one case if you make sure that your accounting system lets you account for the goods concerned. You must use the correct tax type and duty rate for each of the products in the mixed case whenever you pay duty.

Contact HMRC (https://www.gov.uk/find-hmrc-contacts/excise-warehousing-excise-goods-movements-and-alcohol-duties-enquiries) if you have any doubts about the capabilities of your proposed system.

For all operations you must:
- record details of any mechanical breakdowns where losses have occurred
- make sure that you take account of and keep secure all remnants from any operation
- keep a separate record of losses (by type) to establish loss patterns
- investigate and record the reasons for any losses or gains outside your established loss patterns
- make sure that all empty packages not intended for immediate reuse are removed from warehouse or placed in packaging materials compartments without delay
- denature or destroy used pads following filtration or other operations
- bring into warehouse only empty packages and quantities of packing materials required for immediate use — you must remove or obliterate any previous identifying marks
Gains and losses during operations

We accept that there will be gains or losses from any operation carried out in a warehouse, and we do not set tolerances or ‘allowable losses’.

It is the authorised Freeport excise business’s responsibility to:
- maintain controls on all operations
- accurately record any gains or losses
Any gain resulting from the operation must be immediately added into the appropriate stock account. Any loss should be recorded and investigated.

You must show that any loss is within your business’s established parameters (considering the type of operation, product, machinery, temperature, and so on). If you fail to do this, or your explanation is not accepted by HMRC, we may ask you to account for the excise duty.

Statements on labels

We may not let you use labels, wrappers, cases or printed matter contained in cases with incorrect or misleading statements or words. For example:
- claiming an exclusively British origin for spirits which are shown by the records to be imported spirits, or vice versa
- claiming an exclusively British or an exclusively foreign origin for spirits which are shown by the records to be a mixture of British and imported spirits
- implying, directly or indirectly, that the trader concerned is a licensed distiller when they do not hold a distiller’s licence
- indicating that the spirits are ‘Scotch whisky’ or ‘Irish whiskey’ when the legal requirements relating to these descriptions are not fulfilled
If you print labels in a foreign language, you must provide an English translation on request.

We may need you to provide written clearance from a Trading Standards Officer for the use of any label. The Food Labelling Regulations contain other requirements for labels on alcoholic product. Get more information from either:
- your local Trading Standards Office
- the Food Standards Agency
Production of excise goods in a Freeport

You can produce excise goods under the Freeport procedure, if you get the correct authorisations.

When you apply to use the Freeport customs special procedure you must show that you plan to produce excise goods in the Freeport.

You’ll also need to:
- apply for the relevant production approval (for example, to become an approved alcoholic product producer (https://www.gov.uk/guidance/check-if-you-need-an-alcoholic-products-producer-approval-appa))
- follow the terms and conditions of that approval
You can check information on excise production in:
- Excise Notice 476: Tobacco Products Duty (https://www.gov.uk/government/publications/excise-notice-476-tobacco-products-duty)
- Excise Notice 2003: Tobacco Duty — the Raw Tobacco Approval Scheme (https://www.gov.uk/government/publications/excise-notice-2003-tobacco-duty-the-raw-tobacco-approval-scheme)
- Excise Notice 2004: Tobacco Duty — Tobacco Products Manufacturing Machine Licensing Scheme (https://www.gov.uk/government/publications/excise-notice-2004-tobacco-duty-tobacco-products-manufacturing-machine-licensing-scheme)
- Tobacco product traceability (https://www.gov.uk/government/collections/rules-for-tobacco-products)
- the alcoholic products technical guide (https://www.gov.uk/guidance/alcoholic-products-technical-guide)
- Production, distribution and use of denatured alcohol (Excise Notice 473) (https://www.gov.uk/government/publications/excise-notice-473-production-distribution-and-use-of-denatured-alcohol)
- Excise Notice 47: duty free spirits — use in manufacture or for medical or scientific purposes (https://www.gov.uk/government/publications/excise-notice-47-duty-free-spirits-use-in-manufacture-or-for-medical-or-scientific-purposes)
- Motor and heating fuels general information and accounting for excise duty and VAT (Excise Notice 179) (https://www.gov.uk/guidance/motor-and-heating-fuels-general-information-and-accounting-for-excise-duty-and-vatexcise-notice-179)
- Biofuels and other fuel substitutes (Excise Notice 179e) (https://www.gov.uk/guidance/biofuels-and-other-fuel-substitutes-excise-notice-179e-from-1-april-2022)
Destruction of goods and deficiencies in stock

If you plan to destroy excise goods within a Freeport excise warehouse, you can only do it if HMRC has authorised you. We retain the right to impose any conditions necessary.

Goods will be treated as having been released for consumption in the UK where either:
- excise goods are destroyed without permission
- deficiencies in stock are identified
You must declare these goods to free circulation and account for all duties.

Cancelling your registration

If you want to cancel your registration you must email: xxx@xxx.xx (mailto:xxx@xxx.xx). You should email at least 30 days before the date on which you need HMRC to cancel your registration.

If we agree to cancel your registration, we will inform you in writing.

On the date of cancellation, you must destroy your certificate of registration.

HMRC may cancel your registration at any time and if we do so we will inform you in writing, giving our reasons for the cancellation. We will offer you a review of our decision or you can appeal direct to the independent tribunal.

When your registration is cancelled, you must immediately destroy your certificate of registration. You cease to be a Freeport excise business the instant we cancel your registration.

Change of ownership of goods in a Freeport excise warehouse

The owner of goods must tell the Freeport excise warehouse before any duty suspended goods are sold whilst held in their premises.

Protocol to Eliminate Illicit Trade in Tobacco products

You must comply with Article 12 of the Protocol to Eliminate Illicit Trade in Tobacco when removing tobacco products from the Freeport procedure and make sure they are not intermingled with non-tobacco products upon their release.

For Freeports and international transit Article 12 states that:
- Each Party shall, within three years of the entry into force of this Protocol for that Party, implement effective controls on all manufacturing of, and transactions in, tobacco and tobacco products, in free zone by use of all relevant measures as provided in this Protocol.
- In addition, the intermingling of tobacco products with non-tobacco products in a single container or any other such similar transportation unit at the time of removal from free zone shall be prohibited.
- Each Party shall, in accordance with national law, adopt and apply control and verification measures to the international transit or transhipment, within its territory, of tobacco products and manufacturing equipment in conformity with the provisions of this Protocol to prevent illicit trade in such products.
After you’ve been authorised

We may visit you and your approved premises to carry out checks on:
- production
- operations
- warehousing
Our controls consist of both audit based and physical checks. While our officers are on your premises you must make sure of their safety in line with the relevant Health and Safety Acts. If you do not provide safe access to your premises and goods held, we may restrict or withdraw your authorisation.

We will normally arrange appointments to visit your premises, but we may also make unannounced visits, particularly when undertaking physical checks. You must give HMRC officers access to any area of your premises during business operating hours or at any time when activity is taking place at the authorised Freeport excise business.

All HMRC officers carry identification which they will produce upon arrival or on request.

Once you are authorised to operate as an authorised Freeport excise business, you have certain obligations under the law. Failure to fulfil these obligations or observe any condition of your authorisation and approval could result in one or all of:
- restriction of your authorisation and approval
- withdrawal of authorisation and approval of some or all the sites for which you are an authorised Freeport excise business
- non-renewal of your authorisation or approval for some or all the sites for which you are an authorised Freeport excise business
- the imposition of a financial penalty
- goods may be liable to forfeiture and you may also be liable to pay any duty due
Authorised Freeport excise businesses involved in alcohol must make sure that they carry out appropriate due diligence checks on their suppliers, customers and supply chains. Read more about due diligence in Excise Notice 196 (https://www.gov.uk/guidance/registration-and-approval-of-excise-goods-held-in-duty-suspension-excise-notice-196#sect10).

Review and appeals procedure

Decisions which you can ask to be reviewed and may appeal are decisions to:
- refuse approval or to revoke an approval
- apply a penalty and the amount of any penalty
- apply any additional conditions or restrictions
If you do not agree with any of these decisions, you can:
- tell the person who issued the decision if you have further information or you think HMRC has missed something
- ask for it to be reviewed by an HMRC officer not previously involved in the matter
- appeal to an independent tribunal
Time limits for requesting a review or an appeal

If you want HMRC to review a decision, you must write to the person who issued the decision letter within 30 days from the date of that letter.

Your written request should set out clearly:
- the full details of your case
- the reasons why you disagree with the decision
- any supporting documentation
You should also state what result you expect from the HMRC review. HMRC will complete a review within 45 days unless they agree another deadline with you.

Appealing after HMRC has completed their review

Send details of your appeal to the tribunal within 30 days of the date of the HMRC review decision letter.