Guidance

Alcohol producers — penalties for late returns and paying duty late — CC/FS78

Published 17 October 2024

If you’re a producer of alcohol, you need to submit returns and pay Alcohol Duty to HMRC. This factsheet tells you about the penalties we can charge you if you don’t comply with these requirements.

We can charge these penalties under section 9 of the Finance Act 1994. A penalty can be a:

• ‘fixed penalty’ — this is a fixed amount
• ‘geared penalty’ — we calculate this on the amount of duty paid late
• ‘daily penalty’ — this is a daily amount

For detailed guidance about Alcohol Duty, go to GOV.UK and search ‘alcohol duty detailed information’.

This factsheet is one of a series. For the full list, go to GOV.UK and search ‘HMRC compliance checks factsheets’.

Your requirement to submit returns and pay Alcohol Duty

To meet the conditions for our approval as an alcohol producer you must:

• submit alcohol production returns
• account for and pay the duty on production removed from approved premises (‘removed to home use’)

How you do this and when depends on the alcohol you’re producing.

You can find guidance about being a:

• wine producer in section 7 of Excise Notice 163, ‘Wine production in the UK’
• cider and perry producer in section 7 of Excise Notice 162, ‘Cider production in the UK’
• beer producer in sections 15 and 16 of Excise Notice 226, ‘Beer production in the UK’
• spirits producer in section 6 of Excise Notice 39, ‘Spirits production in the UK’

To read these Excise Notices, go to GOV.UK and search ‘Excise Notice alcohols’, or search the name and number of the relevant notice.

Fixed penalties if you don’t submit a return on time

We can charge a fixed £250 penalty if you don’t submit a return on time.

We can charge a penalty for each return that is late. For example, if 10 returns are outstanding, we may charge you 10 £250 penalties. This is £2,500 in total.

You can find out when returns are due in the relevant Excise Notice.

Geared penalties if you don’t pay duty on time

We can charge a penalty if you pay the duty late. This is either 5% of the amount of duty due or £250, whichever is the higher amount.

For example, if there is £9,000 of duty paid late, the penalty will be 5% of this amount. This is £450. If the duty is £4,000, the penalty would be £250. This is because 5% of £4,000 is £200. This is lower than the £250 minimum amount.

You can find the due date for payment of duty in the relevant Excise Notice.

Daily penalties

If we charge you a fixed or geared penalty, we can also charge you daily penalties. We can do this until you put things right.

If we decide to charge you daily penalties, we charge these at a rate of £20 a day for each day you don’t comply.

What to do if you disagree

If we charge you a fixed, geared or daily penalty, we’ll send you a penalty notice. If you disagree, you’ll be able to appeal. The penalty notice will tell you how.

For more information about your appeal rights, go to GOV.UK and search ‘HMRC1’ or ‘disagree with a tax decision’.

If you have a reasonable excuse

We won’t charge you a penalty if you have a reasonable excuse for not submitting your returns or paying what you owe on time.

A reasonable excuse is something that stopped you from meeting a tax obligation on time, which you took reasonable care to meet. It might be due to circumstances outside your control or a combination of events. Once the reasonable excuse has ended, you must put things right without any unnecessary delay.

Whether you have a reasonable excuse depends on the circumstances of the failure to meet the obligation and your particular situation and abilities. This may mean that what is a reasonable excuse for one person may not be a reasonable excuse for someone else. If you think you have a reasonable excuse, please tell us. If we accept that you have a reasonable excuse, we will not charge you a penalty.

If there was anything about your health or personal circumstances that contributed to you not meeting your tax obligations, please tell the officer you’re dealing with. Telling them will mean that they can take this into account when considering whether you had a reasonable excuse.

Other penalties we can charge if you send an inaccurate return

As well as submitting returns on time, you need to make sure the information on your return is complete and accurate. If you don’t do this, we can charge you an ‘inaccuracy penalty’.

If we’re ever considering charging an inaccuracy penalty, we’ll tell you more about these at the time.

If you need help

If you have any health or personal circumstances that may make it difficult for you to deal with us, please tell us. We’ll help you in whatever way we can. For more information, go to GOV.UK and search ‘get help from HMRC if you need extra support’.

You can ask someone else to deal with us on your behalf. For example, a professional adviser, friend or relative. However, we may still need to talk or write to you directly about some things. If we need to write to you, we’ll send a copy to the person you’ve asked us to deal with. If we need to talk to you, they can be with you when we do, if you prefer.