Notice

Beer production in the UK

Updated 4 November 2024

Other notices on this or related subjects

Registration and approval of excise goods held in duty suspension (Excise Notice 196)

Receive goods into and remove goods from an excise warehouse (Excise Notice 197)

Excise duty drawback (Excise Notice 207)

Excise Notice 209: civil penalties — fixed, geared and daily

Check if you need to declare goods you bring into or take out of the UK

VAT relief for suppliers to visiting forces (VAT Notice 431)

VAT guide (VAT Notice 700)

Excise Notice 2002: Alcohol Wholesaler Registration Scheme

1. Introduction

1.1 About this notice

This notice explains the effects of the law and regulations covering the production, storage and accounting for duty on beer.

It contains various technical terms and you can find the glossary helpful — check section 34.

The effects of the law and regulations covering the handling of beer in excise warehouses are explained in registration and approval of excise goods held in duty suspension (Excise Notice 196) and receive goods into and remove goods from an excise warehouse (Excise Notice 197).

1.2 Who should read this notice

This notice is intended for:

• commercial brewers

• packagers of beer

• importers and exporters of beer

1.3 Where to find the relevant law

You will find the main legal provisions relating to the production, holding and movement of beer in the:

• Finance (No. 2) Act 2023

• Alcoholic Liquor Duties Act 1979

• Beer Regulations 1993 (SI 1993/1228)

• Alcoholic Products (Excise Duty) Regulations 2023

Other legislation can also apply to brewers and packagers. This includes the:

• Customs and Excise Management Act 1979

• Revenue Traders (Accounts and Records) Regulations 1992 (SI 1992/3150), which cover the keeping of records

• Excise Goods (Drawback) Regulations 1995 (SI 1995/1046)

• Excise Goods (Holding, Movement and Duty Point) Regulations 2010

1.4 Parts of this notice that have legal force

Sometimes the law says that detailed rules on a particular matter can be set out in a notice published by HMRC. Paragraphs 7.5, 8.2, 9.24, 9.27, 10.3, 10.8, 11.3.5, 17.3, 17.4, 17.5, 17.6, 20.12, 20.13, 20.19 and 31.3 have legal force.

2. The basics

2.1 Beer

In the Finance (No. 2) Act 2023, beer is defined as including:

• ale, porter, stout and any other type of beer

• any other product which is made or sold as beer (or as a substitute for beer)

This includes mixtures of beer with non-alcoholic drinks, (for example, with lemonade to produce shandy). Also classified as beer for duty purposes are certain mixtures of beer with alcoholic product where the final product strength does not exceed 5.5% ABV — check section 19.

No duty is chargeable in the UK on beer that does not exceed 1.2% ABV.

2.2 How the duty system works

Brewers and their production premises must be registered with us for Alcohol Duty purposes — read sections 3 and 4.

Beer:

• becomes liable to duty when it is produced or imported — read section 7

• can be held on or moved between registered premises or to excise warehouses without payment of duty — this is known as duty suspension — read section 9

Packagers of beer can apply for registration to receive bulk beer for packaging and to hold that packaged beer without payment of duty — read sections 3 and 5.

Duty:

• is charged on the litres of pure alcohol and alcoholic strength (alcohol by volume) of the beer — read section 7

• is normally calculated by reference to the quantity and alcoholic strength stated on the package label or invoice — read sections 11 and 12

• becomes payable when beer is released from or consumed in registered premises or excise warehouses — read section 7

• can also be paid on the constructive removal of beer held in duty suspense on registered premises — read paragraph 7.5

2.3 How to calculate and pay the duty

You must:

• keep records of all beer produced

• keep records of all beer leaving registered premises, or otherwise passing the duty point — read paragraphs 7.3 and 7.5

• calculate duty due on all beer released for home use — read paragraph 7.6

• keep an Alcohol Duty account — read section 13

• complete an Alcohol Duty return (EX46) — read section 15

• pay the duty by direct debit unless HMRC has specifically agreed otherwise — for details on duty payment, read section 16

If your products are eligible for Small Producer Relief, you must:

• calculate your Small Producer Relief rate before the start of a production year

• keep records of all pure alcohol in the beer produced in an Alcohol Production Account — read paragraph 8.9 and section 14

• keep records of all small producer beer you handle in duty suspension

2.4 Visits by HMRC

We will make visits to make sure duty is being correctly assessed and accounted for on all beer leaving registered premises. Assurance is based on auditing your commercial, accounting and management control systems and on physical checks. We will carry out physical checks on production, stock and movements of beer in duty suspension.

2.5 Appointments

When we intend to carry out our checks we’ll normally make an appointment. Occasionally, we can make visits without appointment but the attending officer will give the reason for the unannounced visit. At any reasonable time you must permit our officers access to any area of the registered premises. You must make sure that all your security personnel are aware that we can visit without an appointment. All of our officers carry identification and will show this when they arrive.

2.6 If you fail to meet your legal obligations

If you fail to comply with the law and regulations relating to this notice (read paragraph 1.4) or do not account for the correct amount of excise duty, we can take action including the issue of assessments and civil penalties. These are explained in Excise Notice 209: civil penalties — fixed, geared and daily. You can also be liable to penalties if you fail to apply to register with HMRC at the right time or if your monthly duty return is inaccurate — read paragraphs 3.9 and 15.8. In many cases you will have the right to appeal.

Full details of the appeals procedure are set out in section 33.

3. Registration: general

3.1 General information

You must be registered as a brewer before you start brewing unless you’re covered by one of the exemptions listed in paragraph 4.4. The proprietor, partnership or company intending to brew beer must apply for registration. A separate registration is required for each premises in which beer is produced.

If you are not a brewer but you package bulk beer, you can apply to be registered if you want to receive the beer in duty suspension for packaging.

You must also register for the Alcohol Wholesaler Registration Scheme if you sell duty paid alcohol to another business. It is the responsibility of any business who purchases alcohol for onward sale or supply to check that the wholesaler they purchase from has been approved by HMRC.

Any business purchasing beer for onward sale or supply from you should check that you have been approved as an alcohol wholesaler. To apply for approval, read Excise Notice 2002: Alcohol Wholesaler Registration Scheme.

3.1.1 Changes in ownership

Registration will not transfer to the new owner of a business where both of the following apply. The:

• existing registered brewery is to be sold or transferred as a going concern (including all assets, liabilities, and obligations)
• sale is from one legal entity, to be carried on as a business in the name of another legal entity

For example, a sole proprietor might sell to:

• another sole proprietor
• a partnership
• a limited company

The new owner must:

• make sure that any necessary registration, is in place before the sale or transfer takes place
• where required, apply for registration

The new owner should apply at least 45 days before the date they need registration. This is the date the business changes ownership. This is unless HMRC allows otherwise.

They should apply by:

• using form BPH1
• providing detail of the original owner’s approvals

Once the original owner is aware of who the buyer will be, they should notify HMRC in writing that they intend to sell their business by contacting Excise and gambling duties enquiries.

HMRC reserves the right to ask for a different application arrangement to the one described in this notice. This may occur where HMRC is satisfied that the new owner has already passed the necessary checks for registration. An example could be the transfer of an existing registered premises (or whole business) between 2 different registered brewers. In such cases HMRC will discuss any revised arrangements directly with the new owner.

At the point that new registrations apply, we will cancel those granted to the original owner before the transfer. We’ll co-ordinate with the new and original owners make sure this happens at the point that ownership changes.

New owner obligations

As a new owner, you must be registered to produce beer, hold beer, or both, without payment of duty as set out in this notice. If you are not registered then: 

• any beer in your possession could be liable to forfeiture
• we will assess you for any excise duty due on beer which you produced or  held whilst not registered
• we may also issue you with a financial penalty for breaching registration requirements

Changes in a registered limited company’s ownership

A limited company’s existing brewery or holding registrations will remain in force if the actual registered legal entity remains the same after a change of ownership. For example, this could occur following a complete transfer of company shares.

If we have concerns that the new owner would not meet the usual background checks we would carry out on a new brewery and there is insufficient assurance around the registration, we will consider:

• cancelling the existing registration of the limited company
• adding conditions and restrictions to the registration to limit any new risk identified

We advise new owners to contact HMRC for advice before the change of ownership. We ask you to be ready to share existing registration information held by that company.

If you are unsure whether you need to make a new application, contact Excise and gambling duties enquiries in advance of any sale or transfer.

Changes to persons with significant control and other key persons in a limited company  

In this notice, a person with significant control (PSC) is someone who holds: 

• more than 25% of shares in the company
• more than 25% of voting rights in the company
• the right to appoint or remove persons from the board of directors

You must tell HMRC where there is:

• a significant partial sale in shares, creating a new person with significant control
• any change to directors and company officials 

If we have concern following any such change, we will consider:

• cancelling the existing registration of the limited company
• adding conditions and restrictions to the registration to limit any new risk identified

If you are unsure whether you need to make a new application, contact Excise and gambling duties enquiries in advance of any sale or transfer. 

Financial security required by HMRC

The new legal entity must make sure that any financial securities required are in place when they take over the business.

3.2 What registration covers

Registration covers the:

• production of beer

• holding of beer in duty suspension

• classes of beer which can be held

Only producers and packagers of beer can be registered under the Beer Regulations 1993. If you’re not a producer or packager of beer, you can hold beer in duty suspension in an authorized excise warehouse. This is explained in receive goods into and remove goods from an excise warehouse (Excise Notice 197).

3.3 The classes of beer

The classes of beer are as follows:

Class	Type of beer
A	Bulk beer held at the same or adjacent premises at which it was produced.
B	Packaged beer held at the same or adjacent premises at which it was produced or packaged.
C	Bulk beer, which was produced elsewhere.
D	Packaged beer, which was produced elsewhere.

Brewers and their brewery premises will normally be registered to produce, hold and move the beer they produce in duty suspension — classes A and B. Additionally they can be registered to receive and hold in duty suspension — classes C and D.

Packagers can be registered to hold the beer they have packaged in duty suspension — class B and to receive and hold bulk beer in duty suspension for packaging — class C.

Brewers who hold class D are allowed to receive, hold and move third party packaged beer in duty suspension either purchased by them or owned by other parties. However, this practice is restricted in that it must be incidental to the main activity in the registered premises which is the brewing of beer. Where this is not the case, you have to apply for approval as an excise warehouse.

3.4 When to apply for registration

At the very least 14 days before you intend to start brewing or want to begin packaging in duty suspension. However, in some cases, it can take up to 45 working days to process your application — read paragraph 3.6.

You can only start to brew or package beer if you hold a valid registration (unless exempt under paragraph 4.4). Refer to paragraph 3.9.

3.5 How to apply

Read section 4 if you intend to brew beer and section 5 if you want to be registered for packaging in duty suspension.

3.6 After applying for registration

Your application will be vetted and is subject to background checks. Should these checks provide insufficient assurance that the business is suitable for registration, more information can be requested. Until this information is received, your application will be put on hold. A visit to your place of business can also be required.

If we accept your application, we will issue you with a Certificate of Registration, which will confirm the date of registration plus details of any conditions that we’ve placed on your registration. You should keep the certificate on the premises to which it refers and make it available to our officers on request.

Acceptance will register your premises as a tax warehouse but not as an excise warehouse. Information on excise warehouses can be found in registration and approval of excise goods held in duty suspension (Excise Notice 196) and receive goods into and remove goods from an excise warehouse (Excise Notice 197).

If we refuse your application, we will inform you in writing and give our reason or reasons. We will offer you a review of our decision or you can appeal direct to the independent tribunal — read section 34.

3.7 How long registration lasts

Registration will last until production or packaging has ceased. You must notify us in writing:

• if you intend to cease production or packaging

• when you’ve actually ceased production or packaging

If you sell your business, your registration may not transfer to the new owner. Read section 3.1.1.

3.8 When a registration would be changed or revoked

We will revoke a registration if a brewer ceases production, or a packager no longer packages bulk beer.

Where we have reasonable cause, we can vary or revoke the terms of registration or restrict the premises, which are registered. For example, where appropriate due diligence checks are not being carried out — read section 32.

When this is necessary, we will inform you in writing giving our reasons for our action. We will offer you a review of our decision or you can appeal direct to the independent tribunal — read section 33.

3.9 Production by unregistered persons or on unregistered premises

Except where registration is not required (read paragraph 4.4), the production of beer by a person who is not registered, or on premises which are not registered is an offence for which there is a penalty. You can avoid a penalty by applying for registration at the correct time. If you have not applied for registration, you must notify us as soon as possible. Depending on the circumstances, we may be able to reduce the penalty.

Read HMRC compliance checks factsheets for more information.

You have the right to appeal if we impose such a penalty. For more information on appeals, read section 33 and the following link.

Read disagree with a tax decision for more information.

3.10 Conditions of registration

There are standard conditions that must be complied with in order to remain registered. You must:

• continue to brew or package beer (read section 3.1)

• follow all the procedures set out in this notice, including the application of appropriate due diligence checks (read section 32)

We can also impose conditions affecting your registration. These can include:

(a) limitation of the extent of registered premises

(b) restriction of the classes of beer which can be received or held on registered premises

(c) financial security for the duty on beer in duty suspension

Any conditions we impose under (a) and (b) will be included on your registration certificate, any other conditions will be notified to you in writing.

3.11 Register temporary storage facilities in association with registered premises

If you have a temporary need for additional storage space (due to seasonal demand) you can apply for temporary registration of any premises under your control within 5 kilometres of your registered premises.

4. Registration of producers

4.1 Do producers and their premises have to be registered

You must be registered if you produce beer unless you’re exempted under paragraph 4.4.

4.2 Premises that must be registered

You must apply to register:

(a) all breweries where you produce and hold beer in duty suspension and premises where you want to receive beer in duty suspension for packaging

(b) any adjacent premises you occupy, that is, not more than 5 kilometres from your premises registered under (a), in which you want to hold beer in duty suspension

4.3 How to apply for registration

To register complete form BPH1 and a detailed plan of your proposed registered premises. The plan must include the position of the vessels or plant you intend to use in the production of beer and where the beer is to be stored.

The plan must be A4 size or less and in black and white with duty suspended areas shaded accordingly. If you intend to have adjacent premises (as described in 4.2(b)) for storage of beer, you should include a plan of the adjacent premises and a map, showing the distance between the brewery and the storage premises, along with your application.

Send them as soon as possible to:

HMRC
Excise Processing Teams
BX9 1GL

If you have an enquiry once your application form has been sent, you can contact the Excise Processing Teams (EPT). For any enquiries before this stage, contact the excise enquiries team.

You must make a reasonable estimate of the amount of alcohol in the beer that will be produced in the current calendar year in your brewery and enter details in the application form. You must make a note in your business records of how you’ve made the estimate.

If you also want to either hold or package beer (or both) in duty suspension, which was produced elsewhere, you should make application for the relevant classes — read paragraph 3.3.

All producers applying for registration for the first time are required to arrange for a guarantee to cover any duty due on beer, removed from your registered premises to the UK home market, until it is paid to HMRC — read section 6.

4.4 Exemption from registration

You do not need to apply for registration to produce beer in the following circumstances:

• brewing solely for your own domestic consumption

• brewing only for research or experimental purposes — read section 17

If you’re registered, any beer you produce for your own domestic consumption will be liable to Alcohol Duty.

4.5 Changes affecting your registration particulars

You must write to the EPT (read paragraph 4.3 for the address) giving details of any changes that can affect your registration. The following changes may need a new application to be completed:

• change of legal entity, for example, formation of a limited company

• change in the ownership or control of your business, check paragraph 3.1.1

It can take up to 45 working days to process your new application, so let the EPT know of any changes as soon as possible.

The following other changes must also be notified in writing:

• changes to partner details — if a partnership

• changes to director details — if a limited company

• change of address of your registered or adjacent premises — this requires a plan that must include the position of the vessels or plant you intend to use in the production of beer and where the beer is to be stored

• cessation of production or packaging

• the production of other excisable goods on your registered premises

• financial difficulties or impending insolvency

• you become VAT-registered or de-registered

It can take up to 15 working days to make changes to your current registration, so let the EPT know of any changes as soon as possible.

Also, you must apply in writing to make any changes to the classes of beer you’re registered to hold.

You must notify the Beer Duty Accounting Centre of the following:

• change of bank account details

• change of your duty guarantor

The Beer Duty Accounting Centre address is:

HMRC payments Beer Duty
HM Revenue and Customs
BX9 1XE

5. Registration of packagers

5.1 You must apply for registration

If you package but do not produce beer (that is you put bulk beer produced elsewhere into containers) you must apply for registration if you want to package the beer in duty suspension.

If you:

• are a secondary packager, that is, you repack packaged beer (for example, reformat 24 can packs into 15 can packs, or repack into special promotion cartons) and want to pack in duty suspension

• intend to pack any other alcoholic products, other than beer, in duty suspension

You cannot apply for registration under the Beer Regulations 1993 but can apply for authorisation of your premises as a trade facility warehouse under the terms of receive goods into and remove goods from an excise warehouse (Excise Notice 197).

However, if you seek approval as a trade facility warehouse to carry out either of these operations, then you need not apply for registration as a packager of beer. The packaging of beer can also be done under the warehouse authorisation.

5.2 What registration covers

Registration covers persons and their premises, in which they want to:

• receive bulk beer produced elsewhere

• hold beer in duty suspension

Also, it will cover the classes of beer which can be held.

5.3 Which premises must be registered

You must apply to register:

a) all premises where you intend to package duty suspended bulk beer

b) any adjacent premises you occupy, that is, not more than 5 kilometres from your premises registered under above, on which you want to hold bulk beer for packaging, or beer, which you’ve packaged

5.4 How to apply for registration

To register complete form BPH1 and a detailed plan of your proposed registered premises. The plan must include the position of the equipment you intend to use in the packaging of beer and where the beer is to be stored.

The plan must be A4 size or less and in black and white with duty suspended areas shaded accordingly. If you intend to have adjacent premises (as described in 5.3(b)) for storage of beer, you should include a plan of the adjacent premises and a map, showing the distance between the packaging premises and the storage premises, along with your application.

Send them to the EPT (read paragraph 4.3 for address) as soon as possible.

If you have an enquiry once your application form has been sent, you can contact the EPT. For any enquiries before this stage, contact the excise enquiries team.

All packagers applying for registration for the first time are required to arrange for a guarantee to cover any duty due on beer, removed from your registered premises to the UK home market, until it’s paid to HMRC — read section 6.

5.5 Changes affecting your registration particulars

You must write to the EPT (read paragraph 4.3 for the address) giving details of any changes that can affect your registration. The following changes would need a new application to be completed:

• change of legal entity, for example, formation of a limited company

• change in the ownership or control of your business, check paragraph 3.1.1

It can take up to 45 working days to process your new application, so let the EPT know of any changes as soon as possible.

The following other changes must also be notified in writing:

• changes to partner details — if a partnership

• changes to director details — if a limited company

• change of address of your registered or adjacent premises — this requires a plan that must include the position of the equipment you intend to use in the packaging of beer and where the beer is to be stored

• change of name of the registered person, for example, change of company name (where the same company number is retained)

• cessation of packaging

• the production of other excisable goods on your registered premises

• financial difficulties or impending insolvency

• you become VAT-registered

It can take up to 15 working days to make changes to your current registration, so let the EPT know of any changes as soon as possible.

You must notify the Beer Duty Accounting Centre (read paragraph 4.5 for address) of the following changes:

• change of bank account details

• change of your duty guarantor

6. Financial security

6.1 What is financial security

For the purpose of this notice financial security is a guarantee given by an approved guarantor (for example, a financial institution) who undertakes to pay money to us in the event of an irregularity covered by the guarantee. Guarantees are the only form of security acceptable to us.

6.2 Why a guarantee is required

Depending on the circumstances, we will or can require a guarantee to safeguard the duty on the following.

A guarantee may be required for movements of duty suspended beer within the UK — read paragraph 6.3.

However, a movement guarantee is always required for imports and exports of beer to or from brewery registered premises.

A guarantee is required if you want to defer payment of duty, that is, for beer that has been produced in the UK and has passed the duty point but for which duty has not been paid to HMRC, although you can be eligible for exemption under the Excise Payment Security System (EPSS) — read paragraph 6.4.

6.3 How to arrange for a movement guarantee

To arrange a guarantee for movements of beer in the UK if requested by us, or intra-EU movements in Northern Ireland, you should refer to section 10 of receive goods into and remove goods from an excise warehouse (Excise Notice 197) and then make a request in writing and send to:

HMRC
Excise Processing Teams
BX9 1GL

Once we’ve agreed your guarantee amount, we will issue the draft wording to your guarantor for completion of the guarantee form and return to the EPT. If satisfied, we will accept the guarantee and return a signed copy to the guarantor. We will write to you to confirm the guarantee has been approved.

6.4 When a guarantee to defer payment of duty not required

You will not be required to provide a guarantee if you’re eligible for authorisation under EPSS. Where an eligible business is approved for EPSS, they can defer payment of duty without providing a guarantee — read paragraphs 6.4.1 and 6.4.2.

6.4.1 The EPSS authorisation criteria

To be eligible to apply for EPSS, you must have normally been VAT registered for 3 years or more. If so, you’ll be assessed against the full EPSS authorisation criteria which include checks on your VAT, excise and debt compliance history.

If you’re trading beneath the VAT registration threshold, you’re eligible to apply if you’ve been registered in an excise payment regime for 3 years or more. If so, you’ll not be assessed against full EPSS authorisation criteria but checks will be made on your excise return, payment and debt compliance history.

Read Excise Payment Security System (EPSS): authorisation criteria for more information.

6.4.2 How to apply for authorisation to make payments without providing a guarantee

You must complete an application form EPSS(B) Excise Payment Security System: application for authorisation to make payments of excise duties without a guarantee or contact the excise enquiries team.

You must send the completed application form to:

EPSS Authorisation Team
Ruby House
8 Ruby Place
Aberdeen
AB10 1ZP

6.5 How to arrange for a guarantee if you do not qualify for EPSS

Your guarantor must complete form C1201 BDAC (Guarantee for payment of sums due to the Commissioners of HMRC) or contact excise enquiries team.

You must send the completed form to:

HMRC payments Beer Duty
HM Revenue and Customs
BX9 1XE

Your guarantee amount should be set at a maximum amount that is sufficient to cover all the duty likely to be due, on beer removed from your registered premises to the UK home market, in one calendar month.

Registered brewers who have premises that are also approved as an excise warehouse will need to have a separate deferment guarantee to cover any duty due on removals from the excise warehouse.

6.6 What happens if you do not provide a guarantee

If you fail to provide a guarantee, you’ll be required to pay the duty due when the beer becomes liable to duty, that is, as soon as you produce beer, rather than delaying payment of the duty until the 25th day of the following month.

6.7 Who can act as a guarantor

Only companies approved by us can act as guarantors. Most banks and insurance companies have this approval, but if you want to check a particular company contact Excise Processing Teams (EPT) (read paragraph 6.3).

6.8 How much your guarantee will cost you

The cost of the guarantee is a commercial arrangement between you and the guarantor.

7. Duty liability

7.1 When beer is charged with duty

Beer is charged with duty once it has been produced or when it’s imported into the UK.

7.2 When beer is produced in the UK

We have the power to determine the point of production, however, unless we’ve notified you otherwise, the production of beer normally begins when the mash is made and beer is produced when the earliest of any of the following events takes place, the time when the:

• beer is put into any package

• beer is removed from the brewery

• beer is consumed

• beer is lost (read section 10)

• beer reaches that state of maturity at which it is fit for consumption

In relation to these events, ‘beer’ includes unfinished beer.

7.3 What is the duty point

Paragraph 7.1 and paragraph 7.2 explain when beer is charged with duty, but duty only becomes payable when the beer passes the duty point, that is when it leaves duty suspension. In addition, beer is considered to have left duty suspension when there is a failure to comply with any requirements relating to the duty suspension arrangements. Duty ceases to be suspended when:

(a) the beer leaves registered premises, unless it is delivered:

• to other registered premises

• to an excise warehouse

• for export

(b) the beer is received by registered premises not entitled on their registered holder certificate to hold that class or description of beer

(c) the beer is constructively removed (read paragraph 7.5)

(d) the beer is consumed

(e) the beer is lost

(f) the beer is irregularly diverted

(g) you’re no longer registered

(h) the premises on which you’re holding the beer cease to be registered

(i) the beer is produced and you’re not registered to hold beer in duty suspense

7.4 When to pay

Normally, the duty should be paid by the 25th of the month following the calendar month in which the beer passed the duty point — read section 16.

7.5 Can I pay duty in advance of beer leaving registered premises

If you consider that it would help your business to account for duty on any duty suspended beer in advance of delivery from registered premises, you can do so. This is known as ‘constructive removal’ and allows the registered holder of the beer to change the status of the beer held on registered premises from duty suspended to duty paid, on payment of the proper duty, without the need to remove the beer from those premises. The duty should be paid by the 25th of the month following the calendar month in which the beer was constructively removed.

The following requirements have the force of law and are made under regulation 15A(3) of the Beer Regulations 1993

You must record the:

• date of any change of status of any beer from duty suspended to duty paid

• products

When beer has been constructively removed, it cannot be returned to duty suspension in registered premises.

7.6 The basis of the duty charge

The duty is based on the quantity and alcoholic strength of the beer and the rate of duty applicable when it passes the duty point — read sections 11 and 12.

Find out the rate of duty to work out how much Alcohol Duty you need to pay.

Brewers with an annual production of not more than 4,500 hectolitres can be eligible for a reduced rate of duty — read section 8.

Beer may also be eligible for a reduced rate of duty if it’s in a container that has a capacity of at least 20 litres at the duty point. Check if you can pay less Alcohol Duty of draught products.

7.7 How to work out the duty at the end of the accounting period

The way you work out the Alcohol Duty you owe has changed.

You must now use the total litres of pure alcohol to work out what you owe.

Check the duty rates for beer to work out how much Alcohol Duty you need to pay.

Unless we’ve agreed you can use a different method, you must work out each part of the calculation to at least 4 decimal places.

To complete a Beer Duty Return (EX46) declaration, you should round down to 2 decimal places.

Follow these steps to calculate the duty in litres of pure alcohol:

1. Total the quantity of beer expressed to 4 decimal places at each particular strength band, which has passed the duty point in the accounting period.

2. Convert the quantity to litres.

3. Multiply by the strength (ABV%) of the beer to find the litres of pure alcohol.

4. Multiply the result by the applicable duty rate to find the duty figure.

5. Add together all duty figures at each strength band (for example, 1.2% to 3.4%, 3.5% to 8.4%) to find the total duty applicable.

The following are examples of the Excise Duty calculation using the full rate of Beer Duty:

7.7.1 Example A

1,684 cases of beer, each containing 24 × 440 millilitre (ml) cans × 3.7%

24 × 440mls = 10.56 litres per case

10.56 × 1,684 = 17,783.04 litres in total

17,783.04 litres × 3.7% = 657.97248 litres of pure alcohol (rounded to 4 decimal places = 657.9724)

657.9724 × £21.01 (the duty rate for beer at least 3.5% but less than 8.5%) = £13,824.000124 (or £13824,00 rounded down to the nearest penny)

7.7.2 Example B

898 cases of beer, each containing 24 × 275ml bottles × 3.8%

24 × 275mls = 6.6 litres per case

6.6 × 898 = 5,926.8 litres in total

5926.8 litres × 3.8% = 225.2148 litres of pure alcohol (lpa)

225.2148 × £21.01 (the duty rate) = £4,731.762948 (rounded down to the nearest penny = £4,731.76 duty to be paid

Information about determining the quantity of beer for duty purposes is in section 11.

For details of the beer return (EX46) and duty payment, read sections 15 and 16.

7.8 How to calculate the duty on mixed-packs

You can produce packages containing products of different strengths and volumes.

The calculation of volume and ABV for duty purposes on such packages is as follows.

A mixed-pack contains:

• 4 × 440ml cans @ 3.5% ABV

• 16 × 500ml cans @ 5.1% ABV

• 4 × 500ml cans @ 7.0% ABV

Volume calculation:

• 4 × 0.44 litres = 1.76 litres

• 16 × 0.50 litres = 8.00 litres

• 4 × 0.50 litres = 2.00 litres

Total pack volume is 11.76 litres

ABV calculation:

1. Multiply the volume (in litres) of each beer by its ABV% to get the litres of pure alcohol amount.

2. Add those litres of pure alcohol figures together and multiply by the duty rate.

1.76 × 3.5% = 0.06 litres of pure alcohol

8.00 × 5.1% = 0.41 litres of pure alcohol

2.00 × 7.0% = 0.14 litres of pure alcohol

Total = 0.61

0.61 multiplied by £21.01 = £12.81

The method described in this paragraph can only be used when one rate of duty applies. Where there’s more than one duty rate within a mixed-pack then duty has to be calculated on an individual basis. For example, if any of the beer exceeded 8.4% ABV this would be subject to a different duty rate than those 8.4% or less.

8. Small producer alcoholic products (previously small brewery beer)

Small Producer Relief (SPR) has replaced Small Brewers Relief (SBR).

If your products are eligible you may be able to pay less duty.

Check if you’re eligible for Small Producer Relief.

8.1 Transition from Small Brewer Relief to Small Producer Relief

Small Brewers Relief has been replaced by Small Producer Relief. As a brewer you must calculate your SPR rate before you can pay the reduced rate of duty on any beer passing a duty point on or after 1 August 2023. You must’ve done this before 1 August 2023 if you’re eligible and use an SPR rate of duty on your September 2023 duty return which covers products that pass a duty point in August 2023.

Any beer produced or passing a duty point on or after 1 August 2023 will not be eligible for SBR.

To calculate the SPR duty rate to use from 1 August 2023, first find out how much relief you can get. Then subtract that amount from the applicable main rate of duty, to get the SPR duty rate to use. Apply this rate to all qualifying beer made in the production year.

A production year is from 1 February up to and including 31 January.

For the transition year 1 February 2023 up to and including 31 January 2024, even though the SPR rate only applies from 1 August 2023, to determine eligibility and calculate the duty discount you should use:

• the actual alcohol production volumes for the full previous SPR year — 1 February 2022 up to and including 31 January 2023

• an estimate of the alcohol production for the full current year — 1 February 2023 up to and including 31 January 2024

An estimate of the production for the full current year must be made before 1 August 2023 to qualify for the SPR rates.

8.1.1 Examples of working out the Small Producer Relief rate

You must recalculate the Small Producer Relief rate before the start of each new production year.

Example 1:

You produce beer with an ABV of 4.5%.

1. The main rate of duty for beer between 3.5% and 8.4% ABV is £21.01.

2. Work out the Small Producer Relief discount you’re eligible for. For this product, the discount is £5.80.

3. Subtract the discount from the main rate.

£21.01 – £5.80 = £15.21

The rate of duty you should use in that production year for all beer between 3.5% and 8.4% ABV is £15.21.

Example 2:

You also produce draught beer with an ABV of 5%. This draught product is eligible for a reduced rate of duty.

1. The reduced rate of duty for draught beer with 3.5% to 8.5% ABV is £19.08.

2. Work out the Small Producer Relief discount you’re eligible for. For this product, the discount is £4.99.

3. Subtract the discount from the main rate.

£19.08 – £4.99 = £14.09

4. The rate of duty you should use in that production year for all draught beer between 3.5% and 8.4% ABV is £14.09.

You must apply the Small Producer Relief rate from the time the product has been produced, rather than the rate in place at the time the product passes the duty point. This still applies even if the product passes the duty point in a different production year to when it was produced.

For example, Company A’s product is produced on 15 January and the SPR rate for that year (£10.00) is applied. It passes the duty point on 7 February, in the next production year, when Company A’s SPR rate has risen to £15.00. The SPR rate paid at the duty point for the product is the rate applied on 15 January (£10.00).

8.2 Alcohol Production Account

This section has the force of law under regulation 6 of the Revenue Traders (Accounts and records) Regulations 1992.

You need to keep a Production Account showing the following information:

• estimate of current year’s production

• a record of your estimate of the current year’s production together with details of how you arrived at the estimate

• previous production year’s actual production (to be recorded each month)

• the calendar month and year in question

• the total quantity (in hectolitres of pure alcohol to 2 decimal places) of alcohol that you’ve produced in that calendar month split if appropriate between your own beer and beer you’ve produced under licence

• the quantity should be reduced to take account of any beer you subsequently determine to be spoilt or destroyed before the duty point

At the end of each calendar year, your annual production totals shown in the Production Account will determine your continued eligibility for the scheme and the reduced rate for the following year. Production must be under 4500 hectolitres of pure alcohol to continue to qualify for the scheme

In addition to the Production Account, all brewers are required to keep a Alcohol Duty account, details of which can be found at section 13.

8.3 Connected premises

Any question as to whether a person is connected with another is determined in accordance with section 1122 of the Corporation Tax Act 2010. The definition of ‘connection’ is very wide but some examples of the circumstances in which people are ‘connected’ are set out in the following section.

8.3.1 Examples

Individuals are connected by marriage, family relationships and the like.

A partner is connected with their business partners and their spouses.

Companies under the same control are connected with each other, and the persons controlling them. A person has control has control of a company if that person exercises, or is able to exercise or is entitled to acquire direct or indirect control over the companies’ affairs.

A company is connected with any shareholder (whether an individual or a company) which has control of the company, whether on its own or together with persons who are connected with the shareholder.

Companies are connected as a result of their being controlled by connected persons, for example, husband controlling company A and wife controlling company B.

8.3.2 Commissioners discretion

In exceptional circumstances, HMRC may treat 2 connected persons as if they are not connected for the purposes of Small Producer Relief. For example, 2 family members are estranged and have no relationship with each other.

8.4 How to make a reasonable estimate of the current small producer year’s production

You must take all of the relevant factors into account including any contracts you already have to supply small producer alcoholic products and any expansion plans.

Be as accurate as possible. If you make an untrue estimate by stating the production premises will produce 4,000 hectolitres of pure alcohol in the current small producer year when you know that a reasonable estimate would be 5,000 hectolitres of pure alcohol, we can recover all of the duty underpaid.

8.5 When to notify HMRC of your estimate

You only have to tell us how much alcohol you reasonably estimate that you’ll produce when you apply for registration with us in respect of that production premises. You do not need to notify us of subsequent estimates, but you must record in your business records of each small producer year’s estimate at the time you make it, together with details of how you arrived at the estimate. This information must be kept in the form of an Alcohol Production Account.

8.6 What’s included in the previous small producer year’s production figure

This is the total quantity of product produced by a production premises or group of connected production premises in the previous small producer year and includes all alcoholic products you’ve produced, whether for yourself or for another producer or third party. It is not the quantity of product removed from the production premises. It is the quantity of product produced and put into tanks, casks, kegs, bottles, or any other receptacles of a kind in which the product is distributed or sent in bulk to be packaged elsewhere.

It includes any product:

• in stock at the end of the year

• consumed on the premises

• used for sampling or research

Details of your production must be kept in the form of an Alcohol Production Account.

8.7 If more than one person produced beer in the same premises during a calendar year

(a) Where more than one person produced small producer alcoholic products in the premises in that small producer year and there was no break in production (because the cancellation and new registration dates are together), the production figure for the purposes of the Small Producer Relief will be the combined total of each person’s production in that small production year.

For example, company A produced 2,500 hectolitres of pure alcohol in the premises from 1 February to 30 September and then sold the premises to company B which produced 1,000 hectolitres in the premises from 1 October to 31 January, the combined production figure for the purposes of the Small Producer Relief is 3,500 hectolitres of pure alcohol — the sum of company A and company B’s production figures.

(b) If there was any time during that year when the premises was not used to produce alcoholic products, for example, company A ceased production in July but only sold the business to company B in September, the 2 companies’ production figures must be grossed-up using the formula.

A ÷ D × 365

Where A is the amount of alcohol produced in the premises in the previous year.

And D is the number of days in that part of the previous year.

For example, company A produced 2,750 hectolitres of pure alcohol during the period 1 February to 30 July and company B produced 1,175 hectolitres of pure alcohol between 1 September and 31 January. The grossed-up small producer year production figure for the premises will be 4,289 hectolitres of pure alcohol, being 3,925 (2,750 + 1,175) divided by 334 (the number of days on which the premises was used to produce alcohol) multiplied by 365.

In either case, company B will need to know details of company A’s previous production. In the case of a transfer of a going concern, the business records, including the Alcohol Production Account should be transferred to the new owner.

8.8 If you share production premises

Where persons share the use of the production premises to produce alcohol in a small producer year, the production figure for the purposes of the Small Producer Relief will be the total production within the premises in that year.

For example, company A produced 3,350 hectolitres of pure alcohol in the premises from 1 February to 31 January and company B produced 675 hectolitres of pure alcohol in the same premises from 1 February to 31 January, the production figure for the purposes of the Small Producer Relief is 4,025 hectolitres of pure alcohol — the sum of company A and company B’s production figures. Therefore, each person will be applying the same rate to any small producer alcohol product that they produce.

On application for registration, each producer must notify us if there is another production premises already registered at the premises. The plan, which accompanies the application, must show the position of the vessels, plant and any separate area held for each producers product.

Each producers alcohol products must be clearly identifiable in the registered premises and in any records, including the duty status of all the alcohol products at any time.

8.9 How production rules apply to premises that are part of a group of connected premises

If the group comprises, for example, 6 premises, 4 of which have been in production for the whole of the previous small producer year, one of which began to produce beer part-way through that small producer year and one is to start producing alcohol during the current small producer year, you simply determine each premises actual or deemed production figure. You’ll need to add all of those figures together to arrive at the group’s production figure for the purpose of making sure you’re eligible for Small Producer Relief.

8.10 If you export duty suspended small producer products

You’ll need to establish in advance of delivery or exportation that the consignee is authorised to receive the small producer product.

If the country you’re exporting to operates a small producer scheme, the consignee may ask you to provide a certificate, endorsed by HMRC, that the product you’re exporting is small producer alcoholic product produced in the UK. This is so they can establish in advance of the importation to their country that the premises in the UK and the product is eligible under their rules. It is your responsibility to be aware of the rules and production volume limits of the small producer scheme in the country you’re exporting to, so that their requirements are met.

You also need to be aware that different production limits apply to Northern Ireland. Check if you’re eligible for Small Producer Relief on Alcohol Duty for the production thresholds by product type for Northern Ireland.

If a certificate is required, you’ll need to follow these steps to make a self-declaration of your production volumes which HMRC will certify.

1. Copy the certificate template shown at section 35 and paste or save as a word document.

2. Complete the first part of the document, then print and sign it.

3. Scan the document and attach to an email.

4. Send the email to nru.alcohol@hmrc.gov.uk.

5. The Excise Processing Teams will validate by completing the ‘Certification — For Official Use’ part of the document and return it to you.

The process is temporary until a new print and post iform is available on GOV.UK.

You’ll need to use EMCS when moving alcohol in duty-suspension to the place of export and in Northern Ireland when moving alcohol in duty-suspension to EU member states. The following statement that beer is ‘small producer alcoholic product’ will be required on the electronic administrative document (eAD):

‘It is hereby certified that the product described has been produced by an independent small undertaking with a production in the previous year of [ insert ] hectolitres of pure alcohol’.

This statement will let the person who removes the alcoholic product from duty-suspension to establish that the alcoholic product is a small producer alcoholic product and calculate the reduced duty rate payable.

A movement guarantee is required for exports.

For more information on deliveries and exports through EMCS, read receive goods into and remove goods from an excise warehouse (Excise Notice 197).

8.11 If you export small producer beer to Ireland, who will validate your APT3 form

Relief for beer brewed in microbreweries is granted in Ireland through a repayment system. In order to qualify for repayment, the importer will need a declaration of your premises production on a form APT3. This form will need to be validated by HMRC for UK breweries. Details of the scheme and the form are available in ‘Microbreweries — establishment and relief’ on the Irish Revenue website. The completed form for validation should be sent to the EPT (read paragraph 4.3 for the address) who will arrange for its validation and return to you.

9. Duty suspension

9.1 What is duty suspension

Duty suspension is the term used to refer to the storage, holding or movement of goods liable to excise duty without payment of duty.

9.2 How duty suspension applies to beer

Beer can be held in duty suspension on premises registered for that purpose, as explained in section 3. Beer can be stored in duty suspension in a warehouse, which has been approved by us. Beer can also be moved in duty suspension — read paragraph 9.6.

9.3 Who can hold beer in duty suspension

Only registered brewers, registered packagers, registered owners or authorised warehouse keepers, approved to receive beer, can hold beer in duty suspension.

9.4 Who’s responsible for the duty on beer in duty suspension

The person holding or moving beer in duty suspension will be responsible for the duty on it. If beer cannot be accounted for to our satisfaction, that person will be liable to pay the duty on it.

9.5 Beer you can hold in duty suspension

You can hold in duty suspension only those classes of beer which your registration allows — read paragraph 3.3. These will be shown on your registration certificate.

9.6 Can beer be moved in duty suspension

You can move beer in duty suspension in the following circumstances:

• between your registered premises and other registered premises or excise warehouse — read this section

• from your registered premises for exportation — read section 23

Beer can also be moved free of excise duty for:

• shipment as stores — read section 25

• delivery to entitled diplomats — read section 24

• delivery to entitled members of visiting forces — read section 24

You can also receive beer in duty suspension, provided you’re allowed to receive that class of beer:

• from other registered brewers or packagers

• from an excise warehouse to your registered premises

• direct from importation to your registered premises

If you send duty suspended beer to an excise warehouse (approved under section 92 of the Customs and Excise Management Act 1979) for bottling, packaging or storage, you’ll need to be approved as a registered owner of warehoused goods under the Warehouse keepers and Owners of Warehoused Goods Regulations 1999 (SI 1999/1278).

9.7 What to do when you receive beer in duty suspension

When you receive a consignment of beer in duty suspension you must:

• check the delivery against the document accompanying the beer, described in paragraph 9.11

• issue a receipt to the consignor within 5 days of the beer being received — this applies to all beer received through EMCS or under simplified procedures

• record issue of the receipt, (you can want to keep a copy of it)

• enter the quantity received into your stock records

• keep the accompanying document

9.8 What to do before you move beer in duty suspension in the UK

You must make sure that you’re sending the goods to a brewer, packager, excise warehouse, Registered Consignee or Temporary Registered Consignee (TRC) which is registered or authorised to receive and store the appropriate class or classes of beer in duty suspension.

9.9 How do I know that a trader is registered or authorised to receive and store beer

You should contact the National Verification Centre by email at nvcglasgow@hmrc.gov.uk to confirm whether your intended customer is registered to receive beer in duty suspension. We will keep a record of your request.

9.10 Will you supply details about conditions or restrictions

We cannot legally supply this information.

9.11 What documents must accompany beer moving in duty suspension in the UK

All intra-UK movements of beer will need to be submitted through EMCS, unless they qualify for the simplified procedures — read paragraph 9.12. An electronic administrative document will have to be raised on EMCS before the movement can start. EMCS automatically allocates an Administrative Reference Code (ARC) that uniquely identifies the movement. The ARC will be on the printed copy of the eAD or should be noted on the commercial document and must travel with the goods. For more information on EMCS procedures, read receive goods into and remove goods from an excise warehouse (Excise Notice 197).

If movements of beer are under simplified procedures and are as described in first bullet point of paragraph 9.12, your normal commercial dispatch documents will be suitable if they contain all the following information:

• a unique reference number

• your name and address

• the name and address of the consignee

• the destination address

• a statement that the beer is in duty suspension

• a description of the beer (that is, product name), the quantity, strength and package size and the date of dispatch from your registered premises

If you’ve been paid or expect to be paid in cash for the supply of beer in duty suspension (or for any service you provide in relation to beer in duty suspension), read paragraph 9.29.

9.12 What the simplification procedures are

Simplification procedures apply to certain UK movements and allows for beer to be moved under duty suspension using commercial documentation or customs documentation instead of EMCS.

These procedures are limited to beer moving between UK registered breweries or 3rd party packagers or, excise warehouses approved to receive and store the beer. Ownership of the beer must remain with the brewer during the course of the movement.

If movements do not meet the criteria, then it will be necessary to use EMCS.

9.13 Do you need a Beer Duty suspension movement receipt

When you move beer in duty suspension to registered or authorised premises within the UK, you will be responsible for the duty on it until you receive a receipt from the consignee. If the movement is submitted through EMCS, the consignee must complete a report of receipt. If under simplified procedures, the consignee must sign the receipt, or a person properly authorised to act on behalf of the consignee. The receipt must contain the information shown in paragraph 9.16.

If you fail to get a receipt within 4 months, you will be liable for the duty due on the beer, even though it is no longer in your possession — read paragraph 9.14.

9.14 If you do not receive a receipt

The consignee must issue a receipt within 5 days of the date of receipt of the beer in their registered or authorised premises. If you do not receive a receipt, you should contact the consignee. If it appears that the receipt has not been sent or been lost in transit, ask for a duplicate. Any such replacement should be clearly marked. If you have not obtained a satisfactory receipt for the beer within 4 months of its dispatch, you must pay the appropriate amount of duty on your next return. If you subsequently receive a receipt, you can credit your duty account with the appropriate amount of duty.

Any difficulty in obtaining receipts, within the appropriate time limit, should be referred to the excise enquiries team. If no receipt is received, but at a later date you’re able to provide alternative evidence of receipt, you will be able to produce this when our officer next visits you. If the alternative evidence is accepted, the officer will authorise a duty credit. Our officer will contact or visit consignees who fail to issue the necessary receipts.

Failure to issue receipts can result in the issue of civil penalties.

If you do not hold a valid certificate of receipt for any beer you’ve sent out in duty suspension, you will be jointly and severally liable to pay the duty with the person who held the beer at the duty point.

9.15 If the receipt shows a discrepancy

If the receipt from the consignee shows that the beer they received differed from that shown on the document accompanying the beer, you should investigate the discrepancy, record the reason and adjust your records as necessary.

For details of procedure under EMCS, read receive goods into and remove goods from an excise warehouse (Excise Notice 197).

Duty must be brought to account on any loss where there is no acceptable explanation.

9.16 Information that must be shown on the receipt

The following applies where the movement of beer meets the criteria for the simplification procedures.

Information which must be shown on a Beer Duty receipt is:

• a unique reference number

• the name and address of the consignor

• the date of receipt

• the name and address of the consignee

• the address where the beer was received

• a statement that the beer is in duty suspension

• a description of the beer (that is, product name), the quantity, strength and package size

Personnel authorised by the registered person must sign the receipt. In addition, the signatory’s printed name together with the date of signature must appear on each receipt.

9.17 Discrepancies between beer received and the accompanying document

You must issue a receipt only for the beer you actually receive. If the movement of beer is under simplified procedures and the copy of the delivery note is being used as a certificate of receipt, you must mark it clearly to show the discrepancy and inform the consignor.

If the movement is submitted through EMCS and, any check of beer to the eAD shows excess shortage or loss, then an inventory of this should be included in the report of receipt to the consignor.

9.18 Beer accidentally destroyed whilst moving in duty suspension

You should tell us if beer moving under duty suspension is accidentally destroyed, for example, in a road accident. Any significant losses should be notified to the excise enquiries team without delay.

Provided we are satisfied that the beer has not been or will not consumed duty will not be payable.

It is important that you retain any information relating to the incident for our inspection.

9.19 Can you receive beer returned under duty suspension

Yes. Since the beer has not passed a duty point you can receive it back into your brewery on the original delivery documentation.

9.20 Conditions for returning duty suspended beer

Duty suspended beer must always be moved in accordance with the detailed procedures laid down in this section. The beer must be subject to the normal requirements of measurement of volume and strength. Proper documentation must travel with the beer and proper receipts must be obtained. You can need to provide security for the duty as explained in section 6.

9.21 Can you destroy duty suspended beer without having to pay the duty

Yes, as long as you follow the procedures in paragraphs 9.22 and 9.23.

9.22 Notice of destruction you must give

You must give us at least 5 working days’ notice if you want to destroy beer outside your registered premises. You must give details of the proposed method of destruction. You must satisfy us that your proposed process will destroy the intrinsic nature of the beer.

Working days excludes Saturdays, Sundays and public holidays.

9.23 Information to give HMRC

You must write to the excise enquiries team and give the following details:

• why you want to destroy the goods

• details of the goods

• the amount of duty involved

• where and when the proposed destruction will take place

• the method of destruction

9.24 Conditions for duty suspended beer destroyed away from registered premises

If the beer is removed from registered premises to be destroyed at a specialist destruction site, the following conditions apply.

The following conditions have the force of law and are made under regulation 33A(1) of the Beer Regulations 1993:

• there must be a complete audit trail which confirms the beer has been destroyed

• the destruction of the beer must be supervised by either:

• an ACR of the brewery, or

• a person within the specialist destruction company who has been appointed by the brewery to supervise the destruction on their behalf. This person must be at management or supervisory level

• a certificate must be obtained from the company as evidence of destruction

9.25 When you can destroy duty-suspended goods without paying duty

We can grant permission if the goods are either:

• damaged

• in a non-marketable condition

9.26 When beer leaves duty suspension

Beer leaves duty suspension (passes the duty point), when any of the following occur:

(a) the beer leaves registered premises unless it is delivered:

• to other registered premises

• to an excise warehouse

• for exportation

• for shipment as stores

• to entitled diplomats

• to entitled members of visiting forces

(b) the beer is received by registered premises not entitled on their registered holder certificate to hold that class or description of beer

(c) the beer is constructively removed

(d) the beer is consumed

(e) the beer is lost

(f) the beer is irregularly diverted

(g) you’re no longer registered

(h) the premises on which you’re holding the beer cease to be registered, or

(i) the beer is produced and you’re not registered to hold beer in duty suspense

9.27 Record keeping

You need to keep a record of every delivery and receipt of beer under duty suspension arrangements showing the date the beer is delivered or received.

The following requirements have the force of law and are made under regulation 6 of the Revenue Traders (Accounts and Records) Regulations 1992

You must keep an up to date stock record of all beer held in duty suspension showing the quantity, strength and description of the beer (that is, product type), in relation to the following:

• beer produced on your registered premises

• beer received from other registered premises, from importation or authorised warehouses

• beer delivered from your registered premises on payment of duty

• beer delivered from your registered premises duty suspended, including exports, shipment as stores, deliveries to entitled diplomats and entitled members of visiting forces

• beer appropriated for consumption on your registered premises

• beer removed for sampling purposes

• beer removed for reprocessing

• beer removed for destruction

• beer constructively removed

• beer lost or accidentally destroyed

Receipts of stock must include goods received from your own production and should be cross-referred to goods received records. Deliveries from stock should be cross referred to goods dispatched records.

9.28 Holding duty paid beer on your registered premises

You can hold duty paid beer on your premises, in addition to beer which you’ve constructively removed (read paragraph 7.5) you can hold other duty paid beer in your registered premises, but only if we are satisfied that you can clearly identify duty paid and duty suspended beer in your records.

9.29 Duty on samples

You will not normally have to pay duty on samples taken for testing for production or quality control purposes from duty suspended beer held on registered premises. Provided you keep a record of samples taken from such beer and our officer is satisfied that these samples have not been released for consumption, no duty is payable.

Duty must be paid, however, on beer used for market testing, for example, consumption by potential customers visiting the brewery.

There is no duty relief for samples taken from duty paid beer.

9.30 Cash transactions

As a registered brewer or packager, you’re required to notify us if you’ve been paid, or expect to be paid, in cash for the supply of duty suspended beer exceeding £9,000. You must complete form W7 or contact the excise enquiries team.

You must send the completed form to the email address shown on the form W7.

If you’re paid, or expect to be paid, in 2 or more instalments, which individually are below the £9,000 notification threshold but in total will exceed this amount, you must also notify us on form W7 when the first cash payment is received.

Provided you have notified the transaction to us, you do not need to wait for us to respond to receipt of the form W7 before removing duty suspended beer to other registered premises or excise warehouses.

You are also required to notify us of any cash payments received (exceeding £9,000) for any service you provide relating to duty suspended beer, for example, storage facilities, handling charges, packaging of beer or use of an Excise movement guarantee.

10. Irregularities, losses and deficiencies in registered premises

10.1 Responsibilities as a registered brewer or packager

As a registered brewer or packager, you’re responsible for the control of beer in your registered premises. You must have the necessary systems in place to control and safeguard your stocks. You must examine critically all losses and deficiencies.

10.2 Duty suspended beer accidentally lost

You do not have to pay the duty, so long as we are satisfied that the beer has been lost in registered premises and has not been consumed.

10.3 Recording losses

You need to keep records of production and processing, and these should indicate how much beer you lose during routine operations. For example, the losses you normally incur during packaging operations.

The following requirements have the force of law and are made under regulation 6 of the Revenue Traders (Accounts and Records) Regulations 1992

For accidental losses you must record:

• the date and time the loss occurred

• the description (product name) and the volume of beer lost and the alcoholic strength if the loss occurred after production has been completed

• the reason why the accidental loss occurred

10.4 Unexplained losses

If beer cannot be accounted for after the start of production and there is no acceptable explanation, you’re liable for duty on the missing beer. It is therefore in your own interest to keep proper records of all losses.

10.5 Offsetting stock losses against surpluses

You can do this only if, in the absence of documentary evidence, you can demonstrate that stock losses and surpluses are related. Your records must contain written details of the reasons why any offsetting was carried out in order to justify the adjustments made to stock records following investigation of gains and losses. You must justify each offset. We do not allow you to accumulate losses and surpluses from various sources and then offset gross totals.

10.6 Losses of duty paid beer

Normally there is no duty relief in respect of beer which is lost after it has passed the duty point.

10.7 Spoilt duty suspended beer

You do not have to pay the duty, so long as we are satisfied that the beer has been unintentionally spoilt, contaminated, or otherwise rendered unfit for consumption in the registered premises and has not been consumed.

10.8 Records of spoiling you need to keep

The following requirements have the force of law and are made under regulation 6 of the Revenue Traders (Accounts and Records) Regulations 1992

You must record:

• the date and time of spoiling

• the description (product name) and the volume of beer spoilt and the alcoholic strength if the beer was spoilt after production has been completed

• the reason why the beer was spoilt

11. Measurement of quantity

11.1 General

We can require duty to be accounted for on the actual quantity of beer in each container as it passes the duty point. However, most packagers do not measure the quantity in each container as they use the ‘average system’ of quantity control.

Under this arrangement the average contents of packages must not be less than the declared contents (that is, that marked on the can or bottle or label or, in the case of kegs and casks, on the invoice or delivery note). Within specified limits the actual contents of any particular container can be more or less than the declared contents.

11.2 Small pack

11.2.1 The method to use for ascertaining the quantity in small pack

Small pack refers to containers of ten litres capacity and less. Packagers are required to fill these containers in accordance with ‘average contents’ rules (the system referred to in paragraph 11.1). The quantity of beer in a container will be treated as the average of the samples taken for the purpose of complying with average contents rules.

11.2.2 The quantity to use for duty purposes when producing beer in small packages

When using the average system of quantity control, duty should normally be charged on the contents declared on the container for beer delivered in small packages such as cans and bottles.

Evidence of compliance with Weights and Measures legislation will be sufficient to accept the labelled contents as the duty base, unless there are grounds for believing that deliberate duty avoidance is involved. Packagers should take suitable care to make sure not only that the can or bottle contains on average at least the amount of beer stated on its label, but also that any volume in excess of the declared contents is minimised.

11.2.3 Taking care when filling

You should monitor the filling process to make sure that the quantity put into the package does not regularly excessively exceed the amount declared on the container. You should record these checks and provide an adequate audit trail to satisfy our officer that care has been taken. Where there is evidence of consistent excessive overfilling, additional duty will be due.

11.2.4 When to pay the additional duty

Duty becomes payable at the end of the accounting period in which a container of beer is delivered to home-use. That is, when it passes the duty point.

Where you’ve incurred an additional duty liability as a result of overfilling, the additional duty should be paid in the relevant accounting period when beer is supplied to home use from your registered premises or from registered premises or excise warehouses owned or operated by your company.

In the case of overfilled containers of beer supplied in duty suspension to third parties, you should record details of these deliveries separately in your records. The law requires that the person, holding the goods at the time of their delivery to home-use, is liable for the duty, including that on the volume in excess of the declared quantity. However, if we are satisfied that the third party was unaware that the container had been overfilled and that the third party is entirely independent of you, we will not normally seek to recover the additional duty due. In deciding whether or not to pursue the additional duty we will take into account the following factors:

• the relationship between you and the third party

• contracts of supply, if appropriate

• the price paid for the goods

• any other information considered relevant

If you fail to either properly record or pay the additional duty due (or both) on excess volume that you’ve delivered to home-use, we will assess you for the additional duty due. If you cannot produce accurate records upon which the additional amount of duty can be readily established, including quantities delivered to home-use, we will use ‘best judgement’.

11.2.5 Combining the results of monitoring the volume for 2 or more products

For small pack, we will normally require you to assess the monitoring results separately for each product. However, if in exceptional circumstances, for example, where a small amount of a seasonal product is packaged and separate monitoring would produce an inequitable outcome, we will consider requests for combining the monitoring results for a number of products.

11.2.6 Recording the volume of beer delivered

Your normal commercial records should be acceptable provided that they contain sufficient information for calculating duty. You’ll also need to enter the total volume of beer delivered during the accounting period on the beer return — read section 15.

11.2.7 Why you must record the volume

Apart from normal commercial considerations, you must record the volume of beer delivered because:

• the volume will affect the calculation of the duty

• if the delivery is under duty suspension and subject to pilferage, an accurate assessment of the loss will be needed

• our officers will want to satisfy themselves as to the accuracy and completeness of your systems and also on the adequacy of duty guarantees

11.2.8 Arrangements for cans with widgets

If the widget you use retains beer, then that retained quantity need not be declared for duty purposes. You must carry out tests to confirm the average retention volume. This average retention must be agreed with HMRC. Once agreed, the ‘due diligence’ concept can be applied to the labelled quantity plus the retained amount.

11.3 Large pack

11.3.1 The method to used to ascertain the quantity in large pack

Large pack refers to containers in excess of 10 litres capacity up to a maximum of 400 litres such as kegs and casks. For containers with a capacity in excess of 400 litres, the quantity for duty purposes is the greater of the actual quantity dispatched or that stated on the delivery note or invoice.

Packagers of large pack containers customarily fill casks and kegs in accordance with ‘average contents’ rules (the system referred to in paragraph 11.1). The quantity of beer in a container will be treated as the average of the samples taken for the purpose of complying with ‘average contents’ rules.

Under these rules, packagers are permitted some latitude in the sampling regime that they adopt. However, in determining volume for duty purposes, packagers will be expected to maintain a minimum sampling rate of one container per filling head per operating day or 0.1% of a production run in excess of 4,000 containers, the samples to be representative of the mix of containers filled. A copy of the sampling protocol, you intend to use for the purpose of assuring compliance with ‘average contents’ rules and for duty purposes, should be retained in your records.

Some smaller packagers do not take samples but use their containers as capacity measures. In order to meet the tolerance requirements in paragraph 11.3.2(d), these packagers should take steps to make sure that the average capacity of their population of containers is such that they are operating within the set limits.

11.3.2 Quantity to use for duty purposes when you produce beer in large pack

The quantity of beer in any container will be treated as the amount ascertained by reference to any information on the label of the container or any information on any invoice, delivery note or similar document issued in relation to the beer, subject to the following conditions:

(a) that you maintain records of the quantity of beer found in samples you take for the purpose of compliance with ‘average contents’ rules

(b) that a proper record is kept of the monitoring and control procedures, including a statement of the sampling protocol, used for the purpose of assuring compliance with these rules

(c) in the case of filling controlled by meter or weighing:

that, in the accounting period, the average volume of the samples for each container size from each racking line does not exceed the following tolerances:

• declared quantity plus 0.5 litres for containers intended to contain a volume not exceeding 100 litres

• declared quantity plus 0.5% for containers intended to contain a volume above 100 litres but not more than 400 litres, or

(d) in the case of containers filled using other systems of control or filling to capacity:

that, in the accounting period, the average volume of the samples for each container size from each racking line does not exceed the following tolerances:

• declared quantity plus 3 litres for containers intended to contain a volume exceeding 200 litres but not more than 400 litres

• declared quantity plus 2 litres for containers intended to contain a volume exceeding 100 litres but not exceeding 200 litres

• declared quantity plus one litre for containers intended to contain a volume of 100 litres and less

These tolerances are set out in the Alcoholic Products (Excise Duty) Regulations 2023.

Containers of 400 litres or more must be treated individually and duty is liable on the total contents.

At the end of each accounting period, for each target population of containers, you should calculate the average volume from the measured volumes of the samples you’ve taken. These sample volumes are to be expressed to 2 decimal places and truncated if necessary. The accounting period average is to be truncated to one decimal place. This calculation should be performed for each racking line for each container size. Individual types of beer can also be treated separately if that is the rule established in your sampling protocol as part of your monitoring and control procedures.

11.3.3 What happens if I exceed the overfill tolerance

In the cases of paragraphs 11.3.2(c) and 11.3.2(d), if the average volume of the samples in a target population of containers for a racking line exceeds the specified tolerance in any accounting period, there will be an additional duty liability when that beer is sent to home use.

The volume on which additional duty is then liable is the whole quantity of beer in excess of the nominal contents for that target population of containers, as specified in paragraph 11.3.2.

You should calculate the additional duty liability as follows:

If you packed by meter or weight control and your target population comprised:

1,000 × 50 litre — containers at 3.6% ABV

500 × 50 litre — containers at 4.2% ABV

and, at the end of the accounting period, your monitoring record shows that the average contents of each container was 50.7 litres, additional duty will be due on the quantity in excess of the nominal quantity, that is, 0.7 litres multiplied by the number of containers delivered to home-use from the target population during the accounting period.

11.3.4 When the additional duty should be paid

Duty becomes payable at the end of the accounting period in which a container of beer is delivered to home use. That is, when it passes the duty point.

Where you’ve incurred an additional duty liability as a result of overfilling, the additional duty should be paid in the relevant accounting period when beer is supplied to home use from your registered premises or from registered premises or excise warehouses owned or operated by your company.

In the case of overfilled containers of beer supplied in duty suspension to third parties, you should record details of these deliveries separately in your records. The law requires that the person, holding the goods at the time of their delivery to home-use, is liable for the duty, including that on the volume in excess of the declared quantity. However, if we are satisfied that the third party was unaware that the container had been overfilled and that the third party is entirely independent of you, we will not normally seek to recover the additional duty due. In deciding whether or not to pursue the additional duty we will take into account the following factors:

• the relationship between you and the third party

• contracts of supply, if appropriate

• the price paid for the goods

• any other information considered relevant

If you fail to properly record or pay the additional duty due on excess volume that you’ve delivered to home-use, we will assess you for the additional duty due. If you cannot produce accurate records upon which the additional amount of duty can be readily established, including quantities delivered to home-use, we will use ‘best judgement’.

This system has been devised taking into account as far as possible existing trade practices so minimising your compliance costs. Any attempt to evade duty by under-declaring the quantity on which duty is charged or by manipulating deliveries to evade duty, can lead to prosecution.

11.3.5 Cask conditioned beer

The following text has force of law under Regulation 5(3) of The Alcoholic Products (Excise Duty) Regulations 2023.

Duty need not be charged on any undrinkable sediment in your cask-conditioned beer, provided:

• your customer (for example, the publican) is made fully aware in writing, at or before the time of receipt, of the quantity of beer on which duty has been charged — if, for example, a barrel (163.7 litres) contains 2.3 litres of undrinkable sediment, the customer must be made aware, by a statement on the label, delivery note or price list and so on, that duty has been charged on 161.4 litres (a copy of the notification to customers must be retained)

• you can, if required to do so, satisfy our officer that only undrinkable sediment has been excluded from the duty charge

Any sediment on which duty has not been charged cannot be included in any subsequent claims for relief on spoilt beer.

11.3.6 How to calculate the amount of undrinkable sediment

There is no prescribed method. You must, however, be able to satisfy us that the method you use gives equitable results.

Sediment levels for each quality of beer and container size must be regularly monitored by brewers and reviewed or amended (as necessary) at least annually and notified to us. Any changes to recipes or ingredients during the year, which would significantly affect sediment levels, must be notified to us and the allowance adjusted accordingly. You must write to the excise enquiries team.

11.3.7 Is there an undrinkable sediment allowance for polypins, mini-pins and bottle-conditioned beer

There is no undrinkable sediment allowance for polypins and mini-pins sold by brewers to the public or on bottle-conditioned beer.

11.4 Imports of small and large pack

International obligations require that we cannot treat imports any less favourably than domestic product. As importers will not necessarily be aware of the actual contents of containers, we will apply the same principle set out in paragraph 11.2.4.

12. Alcoholic strength

This section applies to all alcoholic products:

• entirely manufactured in the UK (sometimes referred to as domestically produced)

• imported into the UK as finished products

• imported into the UK as bulk products and bottled here

• imported into the UK as bulk products and used as ingredients in a final product made in the UK (for example, bulk wine imported and used to make a domestically produced ‘other fermented product’)

12.1 What alcoholic strength means for duty purposes

Alcoholic strength is the percentage of alcohol by volume (ABV) in the product measured at 20°C. For duty purposes, you should round this down to one decimal place. For example, 7.59% ABV becomes 7.5% ABV.

12.2 Alcoholic strength for duty purposes

It’s mandatory for prepacked products to include the strength of an alcoholic product either:

• directly on the container

• on a label attached to the container

For duty purposes the labelled strength is the strength of the alcoholic products in most cases.

If there’s no label strength (for example, on a very old bottle,) you must use the strength on any document relating to the container. If there is no other documentation, you should use the actual strength method (read section 9.5).

12.3 Cask conditioned products

Cask conditioned products, including bottle-conditioned products and any other unfinished products, will continue fermenting after removal from production premises. This will result in an increase in strength. You must account for duty on the strength at which you expect the product to be when it is consumed. This is also the strength which would be shown on the label or invoice or delivery note.

For duty purposes, the strength of the cask conditioned product is the greater of one of the following:

• the final strength the product is expected to have when sold

• the strength shown on the label of the product

• the strength shown on any invoice related to the product

• the strength shown on any delivery note relating to the product

• the strength shown on any other document issued in relation to the product

12.4 Measuring strength

You can use any method to measure the strength of a product, if your chosen method produces a result equal to, or greater than that described in Schedule 2 of the Alcoholic Products (Excise Duty) Regulations 2023.

12.5 The actual strength method

This is a scientific measurement taken using the process described in Schedule 2 of the Alcoholic Products (Excise Duty) Regulations 2023. HMRC will accept any method that measures strength as long as it’s equal to, or greater than that described in Schedule 2.

12.6 Due care

This section has force of law under regulation 3(7) of the Alcoholic Products (Excise Duty) Regulations 2023.

You must take due care to make sure the strength used to calculate the duty accurately reflects the actual strength of the product. If you have not done this, the strength will be worked out using the actual strength method.

If you’re a UK producer, you must continuously monitor and record ABV results. These will normally fall randomly on either side of the target strength which will be the declared strength. The average of your results should be close to the target strength.

Occasionally the ABV can vary, but as long as you take appropriate action to return the strength of the product to within its normal specification, due care will have been demonstrated. You must keep records of action taken to maintain product strength within control limits.

For imported products, you must make sure that the ABV of your products is labelled according to any relevant labelling legislation. For example, the provisions in Annex XII of the Food Information to Consumers Regulation or (for wine of fresh grape) Article 44 of EU Regulation 2019/33 (as far as these apply as retained EU law).

Your commercial due diligence should make sure that the:

• products you import conform to legal specifications

• ABV on the label conforms to the tolerances specified in the relevant labelling rules for each product category

For cask conditioned products, in addition to these actions, you must regularly monitor and record the actual strength of a quality control sample of cask and bottled conditioned products at the expected time of consumption. This is to establish its alcoholic strength. The method and frequency of checking is up to you, but you must be able to satisfy HMRC of the accuracy of your results.

12.7 How we will check accuracy

For UK-produced products, HMRC officers will examine your testing results and records of actions taken to keep declared strength in line with actual strength. If the results have consistently fallen above your target, we’ll want to confirm that action was taken as soon as the problem was identified to bring the process back into control or to change the declared ABV.

For imported products, HMRC officers will look at your commercial due diligence. If the ABV is consistently above the declared ABV by an amount greater than the permitted tolerances, we’ll want to see an action plan to bring the production or labelling processes into alignment.

For either imported or UK produced products, if you’ve failed to take appropriate action, an assessment may be raised for the additional duty due.

12.8 Dispute over the strength

HMRC officers can take samples of product which will be analysed using the method described. The analysis result will establish the actual dutiable strength of the product.

The following is taken from Schedule 2 of the Alcoholic Products (Excise Duty) Regulations 2023:

• take a representative sample and, after clearing it of sediment and gas in an approved manner, a definite quantity by measure at the temperature of 20°C is made alkaline by the addition of calcium hydroxide, and then distilled

• make up the distillate at the temperature of 20°C with distilled water to the original measure of the quantity before distillation

• ascertain the strength of the distillate by determining its density in air at the temperature of 20°C by means of a pycnometer

• the strength of product is the percentage of alcohol by volume in the ‘Laboratory alcohol table’ which corresponds to the density determined by this method — where the density falls between 2 consecutive numbers in the table the strength will be determined by linear interpolation

Where a result achieved by this method is rendered inaccurate by the presence of substances other than alcohol, that method will be adjusted for the purpose of producing an accurate result.

13. Alcohol Duty account

13.1 What an Alcohol Duty account is

A Alcohol Duty account is a summary of the Alcohol Duty due in each accounting period.

You must keep an account which contains the following information the:

• amount of duty due on all beer which leaves duty suspension — read paragraph 7.3

• amount of duty reclaimed on spoilt beer which has been reprocessed or destroyed — read section 20

• amount of duty reclaimed on drawback — read paragraph 23.4

• amount of any underdeclarations from previous periods — read paragraph 15.9

• amount of any overdeclarations from previous periods — read paragraph 15.9

• net amount of duty due for the period and the date and method of payment

You should keep the Alcohol Duty account in a specific book or ledger opening. An example of a Alcohol Duty account is shown in paragraph 13.3, but another form of account containing the same information can be acceptable.

13.2 Keeping your duty account on computer

You can keep your account on your computer so long as you’re able to print a copy of the account whenever we require you to do so.

13.3 Example of a Alcohol Duty account

Period from 1 June 2017 to 30 June 2017	Duty paid
Duty due on all beer released from duty suspension for consumption (separate totals are required for each rate of duty).	124,571.20
Underdeclarations from previous periods	—
Overdeclarations from previous periods	—
Net Duty Due	124,571.20
Spoilt Beer (including any relief for reprocessed beer)	- 402.80
Drawback	- 350.00
Net amount of duty due for the month	123,818.40
Paid on 25 July 2017 by Direct Debit	—

14. Records

14.1 General

As a revenue trader you need to keep and preserve certain records and accounts as evidence of your business activities (The Revenue Traders (Accounts and Records) Regulations 1992). If your records do not satisfy our requirements we can direct you to make the necessary changes.

You have to give us access to all your business records.

14.2 Types of record to keep

You have to keep a record of:

• production

• stock

• handling

• buying

• selling

• importation

• exportation of beer

As a registered produced or packager of beer we also require you to keep a Alcohol Duty account (read section 13), a spoilt beer record (read section 20) and records of beer in duty suspension (read section 9).

14.3 How long to keep records for

You must normally keep your business records for 6 years. If, however, this causes problems, contact the excise enquiries team to ask if you can keep some of your records for a shorter period. You must get our agreement before destroying any of your business records that are less than 6 years old.

14.4 Keeping original documents

You can keep your records on any form of storage technology, provided that copies can be easily produced and that there are adequate facilities for allowing our officer to view them when required.

Contact the excise enquiries team to get agreement before you transfer records. You can be required to operate the old and new systems side by side for a limited period of time. We can refuse or withdraw approval if any requirements are not met.

Make sure that you keep your original registration certificate in a safe place.

14.5 Computer records

You can also keep your records on a computer, for example, on magnetic tape, disc and so on, provided they can be readily convertible into a satisfactory legible form and made available to us when required. If you do keep your records on a computer we require access to it so that we can check its operation and the information stored. We can ask for help from you or anyone else having charge of, or otherwise concerned with, the operation of the computer or its software.

If a computer bureau is employed, you’re responsible for arranging for the bureau to make your records available to us when we want to read them. Normally this will be at your principal place of business.

If, after you’ve been registered, you decide to use a computer or the services of a computer bureau for Alcohol Duty accounting, you should contact the excise enquiries team. Where you intend to use your own computer, you should notify our helpline at the systems design stage or earlier.

15. Beer returns

15.1 What a return is

The Beer Duty return (EX46) is used to declare your liability for Beer Duty and movement of beer in each accounting period.

15.2 How often to make a return

You must make a return of your Alcohol Duty liability each accounting period, which will normally be a calendar month.

If your duty liability for the month is nil you must still send us a return.

15.3 If you do not submit a return

If you fail to submit a return on time you’ll be liable to penalties — read paragraph 2.6. We have the authority to estimate the duty which would have been due and to pursue that debt through the civil courts — read paragraph 16.6.

If you foresee any problems, you should immediately contact:

HMRC payments Beer Duty
HM Revenue and Customs
BX9 1XE

Telephone: 03000 583 920

15.4 How to get a return

You must submit a Beer Duty return using form EX46.

15.5 How to complete the return

The Beer Duty return (EX46) has instructions on how to complete the return.

15.6 The signing declaration

The proprietor, a partner, the Company Secretary or a Director of the company should sign the declaration on the return. If this is not possible, you can authorise someone to sign the return on your behalf.

15.7 Submitting a single duty return for multi-site operations

If you have more than one registered premises owned by the same legal entity you can, on request, combine the duty liability for each in the one duty return.

However, an individual beer duty summary should be maintained for each site and consolidated in a Alcohol Duty account by the site submitting the return.

You should note that if you submit a single duty return for more than one set of registered premises, you must still declare details of all dispatches of beer sent out in duty suspension in box 2 of your return including duty suspended beer sent from one of your registered premises to another.

You must declare details of all receipts of beer received in duty suspension in box 3 of your return, including duty suspended beer received by one of your registered premises from another.

15.8 Accuracy

You can avoid a penalty by checking that you’ve given complete and accurate information in your duty return. You can be liable to a penalty if your return is inaccurate and, as a result, you do not pay enough duty or if you do not notify us that a duty assessment we’ve sent you is too low.

If you’re aware you’ve made a mistake on your return, you must notify us as soon as possible. Depending on the circumstances, we may be able to reduce the penalty.

If you deliberately make a false duty return, you can face prosecution for the offence and incur a heavy penalty.

For more information on penalties, read paragraph 3.9.

You have the right to appeal if we impose such a penalty. For more information on appeals, read section 33 and paragraph 3.9.

15.9 If you discover errors relating to earlier accounting periods

If you discover under declarations relating to previous accounting periods which total less than £1,000 duty, you must enter the amount in your duty return for the current accounting period.

Similarly, if you discover overdeclarations totalling less than £1,000 duty, you must enter the amount in your return. You do not have to send a written advice, but details of the errors must be retained for inspection.

If, however, either the total underdeclaration or total overdeclaration (or both) is £1,000 duty or more, you must, in addition to making the adjustments outlined, send full details in writing to the Beer Duty Accounting Centre (read paragraph 15.5 for the address).

15.10 When to send a return

You must submit your return so that it arrives not later than the 15th day of the month following the accounting period. When the 15th day falls at a weekend or on a public holiday the return must be received by the previous working day.

15.11 Where to send the return

All registered brewers and packers must send returns to the Beer Duty Accounting Centre. Read paragraph 15.3 for the address.

15.12 Submitting returns produced on a computer

If you keep your records on a computer and want to make your Beer Duty return using a computer prepared form, you must contact the Beer Duty Accounting Centre (read paragraph 15.3 for the address).

The format of your return must conform to that of the official Beer Duty return (EX46).

16. Duty payment

16.1 Finding the rate of duty

Check the duty rates for beer to work out how much Alcohol Duty you need to pay.

16.2 Budget changes

You are responsible for declaring the correct amount of duty from the effective date of change. When the duty rate changes, we will attempt to advise you of the new rate, the effective date and the time of the change.

When the rate changes during an accounting period, you must complete separate EX46 forms for the period at the old and new rates, showing pre or post budget as appropriate.

16.3 Who is liable

The person holding the beer at the duty point is liable for the duty. This can not necessarily be the owner of the beer.

16.4 When to pay

You must pay the duty shown on your monthly Beer Duty return no later than the 25th day of the following month.

If the 25th falls on a Saturday, Sunday or public holiday, you must pay by the previous working day.

16.5 How to pay

HMRC accepts payment by a range of methods but recommends you pay electronically using one of the following options. If you want to pay by any method other than Direct Debit, you must contact the Beer Duty Accounting Centre in advance (read paragraph 15.3 for the address and telephone number):

• Direct Debit

• approve a payment through your online bank account

• Bacs (Bankers Automated Clearing System) Direct Credit

• CHAPS (Clearing House Automated Payment System)

• internet or telephone banking

For more information and help read the Paying HMRC guidance.

Following the introduction of a cap on 31 May 2012 by the board of Bacs Payments Schemes Ltd (Bacs) which limits the maximum value of any single Bacs transaction, HMRC are no longer able to collect Direct Debits more than £20 million. If you have a payment to make which is more than £20 million, you need to make arrangements with your own bank to make sure payment reaches HMRC on the due date, by an alternative payment method such as CHAPS.

16.6 If you do not pay the duty

If you fail to pay the duty by the due date, you will be liable to a civil penalty of 5% of the duty or £250 — whichever is greater. In addition, further penalties can be incurred for each day that you fail to pay the duty. Details of civil penalties are contained in Excise Notice 209: civil penalties — fixed, geared and daily. If you fail to pay on time, we can direct you to pay duty as soon as a duty point occurs rather than allowing you to defer payment of duty liability until the 25th of the following month.

At any time after the due date for payment, our officer can take action to take possession of all beer, materials and equipment used in brewing and packaging or connected with your trade as a brewer or packager, which are either owned by you or are in your possession and auction them to recover duty due plus pay any Taking Control of Goods fees. Read also paragraph 2.6.

17. Experimental brewing

17.1 Registering

If you brew solely for the purposes of research or experiments in the production of beer, you do not need to register for Beer Duty purposes nor pay duty on the beer. However, you must still notify us, read paragraph 17.3.

However, if you intend to sell or give away any of the beer you produce you must apply for registration and pay duty on such beer.

If you initially brew solely for the purposes of research or experiments but intend at a later date to sell or give away any of the beer you produce, you must apply for registration at the outset.

17.2 Is duty payable on beer brewed for experimental purposes by registered brewers

No. Duty relief will be given on any beer brewed by a registered brewer which is to be used only for research or experiments in the production of beer. The relief from duty is subject to conditions.

17.3 Tell us of your intention to produce beer for experimental purposes

If you’re not a registered brewer you must, before you start the production of beer for research or experimental purposes, write to the EPT (for address, read paragraph 4.3).

The following requirements have the force of law under Section 81 of Finance (No. 2) Act 2023

You must advise the EPT of:

• your name and the address at which you intend to produce beer

• your normal business or occupation

• the quantity of beer you expect to produce each month

• how you intend to dispose of the beer

• details of any other trade you have in goods liable excise duties

As well as providing the information shown above, you must also observe the conditions shown in paragraph 17.5 and keep the records specified in paragraph 17.6, otherwise duty will be payable on the beer.

17.4 Research and experiment

This section has force of law under Section 81 of Finance (No. 2) Act 2023

To qualify for relief, the beer must be brewed to test new brewing processes, equipment and ingredients. The relief can apply to trials by registered brewers who want to test the suitability of new brewing methods or materials, and do not intend to sell the beer.

17.5 Disposal of beer produced by registered brewers

This section has force of law under Section 81 of Finance (No. 2) Act 2023

To qualify for relief from duty, you must not sell or give away any of the beer produced. You can conduct taste tests among your employees, but the beer must not be consumed in any other circumstances. Taste tests must not include prospective or actual customers.

When the research or experiments are finished all the remaining beer must be destroyed.

17.6 Record keeping

This section has force of law under Section 81 of Finance (No. 2) Act 2023

You must keep a record showing:

• the date of production

• the quantity and ABV of beer produced

• the date and method of destruction

• the quantity destroyed

Records must be in a form acceptable to our officer and produced at any reasonable time. Records must be kept for at least 6 years, unless otherwise agreed with our helpline.

17.7 Selling the finished beer

You can do this only if you’re a registered brewer. If so, any beer that you dispatch for consumption becomes liable for duty in the normal way.

18. Mixing of alcoholic products

18.1 What mixing means

It means mixing 2 or more alcoholic products together. This includes mixing 2 of the same type of alcoholic products, for example 2 different brews of beer.

18.2 Mixing restrictions

You can only mix 2 or more alcoholic products together if:

• the mixing takes place before the Excise Duty point and the products are mixed either in an excise warehouse or under a relevant alcoholic products production approval granted by HMRC, for example a cider registration

• the Alcohol Duty on each product being mixed has been paid, are all the same alcoholic strength and all products being mixed are the same type, like cider or beer

• the Alcohol Duty on each product being mixed has been paid, and that amount is equal to or exceeds the amount of duty that would, if the mixing had taken place before the Excise Duty point, have been chargeable on the resulting mix

• the Alcohol Duty on each product being mixed has been paid, the resulting mix is intended for consumption on the premises on which the mixing takes place

18.3 Post-duty point dilution of alcoholic products

You cannot mix water or any other substance with alcoholic products on which Alcohol Duty is chargeable if the:

• mixing takes places after the Excise Duty point

• resulting product is intended for sale

• mixing had taken place immediately before the Excise Duty point, the amount of Alcohol Duty would have been greater than the amount actually payable

18.4 Mixing and diluting at the point of sale

The following requirements have force of law and are made under section 86(5)(c) of Finance (No.2) Act 2023

Mixing of duty paid products for consumption on the premises must be either:

• undertaken by the customer from the separate drinks provided

• provided by the server at the specific request of a customer from separate duty paid alcoholic products

This allows for the provision of drinks like lager and bitter mixes or cocktails on retail premises.

19. Additions to beer

19.1 Priming

19.1.1 What priming is

Adding sugar solution to beer to encourage secondary fermentation and increase its alcoholic content — read paragraph 12.2 and section 30.

19.1.2 Where beer can be primed

Beer can be primed on registered premises and on any other premises which we approve. If you’re a registered brewer or registered holder and you want to prime beer on premises which are not registered, you must seek our approval. When you obtain such approval, you must keep a record on your registered premises of any such premises at which priming takes place.

If you’re not a registered brewer or registered holder you cannot prime beer unless we’ve approved the arrangements.

19.1.3 How to get approval of premises for priming

You must write to the excise enquiries team, giving the following details:

• the address of the premises at which you want to undertake priming

• the addresses of registered premises from which the beer will be received

• the estimated annual quantities of the beer to be primed

• the destination of the primed beer

19.1.4 Record keeping

Your records must include the following:

• the date and time of the priming

• the type of beer (product name) that is primed

• the quantity and strength of beer that is primed

• the type and quantity of priming’s added

• the quantity and expected strength of the resulting product

These records should be kept on the premises where priming is carried out and made available to our officer when requested.

19.2 Finings

19.2.1 Where finings can be added

You can add finings (provided they do not contain alcohol), to beer on any premises.

19.2.2 Record keeping

We do not require any record to be kept of the addition of finings to beer but, if you do keep records, we can ask to read them.

19.3 Other additions

19.3.1 Other additions allowed

Once beer has passed the duty point, no substance which causes or can cause an increase in the duty liability of the beer can be added to it until the beer is sold or supplied to the consumer, unless we’ve approved the addition of that substance. If you want to mix beer with any such substance, including non-alcoholic beverages, after the duty point, you must seek prior approval.

You must write to the excise enquiries team.

However, if you only intend to produce drinks whose alcoholic strength is not more than 1.2% ABV, you do not need to seek our approval.

19.3.2 Beer mixed with spirits where the finished product exceeds 1.2%

Beer mixed with spirits will be liable to the spirits rate of duty. This applies even if the majority of the product is sourced from the beer rather than the spirits. There are only 2 instances where an element of spirit can be used in the manufacture of ‘beer’ products, without the finished product incurring the spirits rate. These are where:

• there are no spirits in the final product, for example, the spirits are used as a carrier for a flavouring which is added at an early stage of production and the actual spirits are burnt off during the course of production. Duty would be liable on the finished product which is the manufactured beer, or

• the spirits added to the product and which form a part of the finished product, are of such a token amount as to make them completely insignificant (that is, the spirits added to the beer are of such a small quantity, they do not lead to a recognizable increase in the alcoholic strength of the beer)

If you’re unsure of the duty category (beer or spirits) that will apply to the product you intend to produce, you should contact the excise enquiries team before production begins.

19.3.3 Beer-based mixed drinks between 1.2% and 5.5% ABV

When beer is mixed with alcoholic (other than spirits) or non-alcoholic beverages, the resulting product is classified as beer.

19.3.4 Beverages within these limits deemed to be beer

These beverages are:

• shandy made with lemonade or a mixture of beer and lemonade, lemon cordial, lemon flavourings, lemon juice, or lemon squash

• lager and lime, or a mixture of beer and lime cordial, lime flavouring, lime juice, lime squash or limeade

• ginger beer shandy, shandygaff, or a mixture of beer and ginger, ginger cordial, ginger, ginger flavouring, ginger squash or unfermented ginger beer

• a mixture of beer and fruit cordial, fruit flavourings, fruit flavoured carbonated water, fruit juice or fruit squash

• a mixture of beer and any alcoholic product (other than spirits — read paragraph 19.4.2)

19.3.5 Beer mixed with other alcoholic product (other than spirits) or substances where the finished product exceeds 5.5% ABV

Beer mixtures containing dutiable alcohol product are liable at the appropriate other fermented products rate of duty.

Beer mixed with non-alcoholic product will also be liable at the appropriate other fermented products rate of duty.

If you’re unsure of the duty category that will apply to any product you intend to produce, you should contact the excise enquiries team before production begins. They will also advise you of any additional approvals you can need (for example, other fermented products licence).

19.4 Alcoholic carbonates

19.4.1 General

These products are sometimes referred to as flavoured alcoholic beverages, but are more commonly known as ‘Alcopops’. They are not necessarily made using beer as an ingredient. If you intend to manufacture products of this type which contain beer, the advice in paragraphs 19.4.2 to 19.4.5 should be followed.

19.4.2 Producing alcoholic carbonates that do not contain beer

Such products will be classified for duty purposes as either other fermented products or spirits. Consequently, additional approvals and licences will be required. You should contact the excise enquiries team before you commence production.

19.4.3 Packaging alcoholic carbonates that are not classified as beer

Additional approvals will be required and you should contact the excise enquiries team in advance.

20. Relief of duty on beer which has become spoilt or otherwise unfit for use

20.1 Beer that’s eligible for duty relief

Any beer which meets all the following conditions:

• it has been charged with duty

• it has become spoilt or otherwise unfit for use

• unless delivered in bulk, it is presented for duty reclaim in the same container in which it left duty suspension — however, where not possible for health and safety or other practical reasons, the beer can be transferred to other containers subject to prior approval from HMRC

20.2 Who can claim the relief

Normally the registered brewer or registered holder who accounted for the duty is the person who can claim relief. Relief cannot be claimed until reprocessing has commenced and destruction has taken place. If either the producer of the beer or the brewer reprocessing the beer did not account for the duty but wants to claim relief, our prior approval to the arrangements must be sought.

You must write to the excise enquiries team.

If a registered brewer purchases duty paid beer which becomes spoilt and they want to destroy the beer and claim spoilt beer relief, they must apply to us for approval to do so.

In the case of beer which was imported on payment of duty, only the person who accounted for the duty on importation will normally be entitled to claim relief, but our helpline will be able to give more information in these circumstances.

In the case of multi-site brewers or packagers, provided the registered premises are operated by the same registered person, claims on behalf of the group can be made and offset on one duty return.

20.3 You do not have to destroy the spoilt beer to claim duty relief

The spoilt beer can be either destroyed or reprocessed.

20.4 What reprocessing means

The relief from duty for reprocessing includes the following operations:

• beer which is to be mixed with other beer on registered premises

• beer which is to be filtered or repasteurised

20.5 If you want to claim relief

You must keep a spoilt beer record containing the particulars shown in paragraph 20.19.

20.6 What quantity to claim relief

You can only claim for the actual quantity of beer destroyed or reprocessed on which duty has been charged.

This will depend on whether you:

• use a spoilt beer vessel

• destroy directly from cask, keg or other package

• a combination of both

If you want to decant beer to determine the volume for relief, you must use a gauged and tabulated spoilt beer vessel or establish the volume by using a properly calibrated meter.

If you destroy or decant for reprocessing directly from cask, keg or other containers, you can only claim for the actual quantity of beer returned on which duty has been charged. In the case of un-broached containers, you should use the declared contents. Broached containers and depot leakers, which can be un-broached, should have their actual contents measured for duty reclaim purposes.

Remember to exclude any undrinkable sediment allowance from the quantity claimed.

20.7 The strength you should base your claim on

Your claim must be based on the strength on which duty was charged.

If you destroy directly from cask, keg or other containers, your claim must be based on the strength on which duty was charged.

Where you use a spoilt beer vessel to claim relief, you must take a representative sample of the beer for laboratory testing to establish the strength. This must be recorded in support of your claim.

20.8 How to claim

At the end of the accounting period, total the entries in the spoilt beer record (including those in respect of destructions and reprocessing of spoilt beer) and transfer the total to your Alcohol Duty account. To claim relief, enter this total (that is, the spoilt beer relief claimed) in your Beer Duty return (EX46).

20.9 Spoilt beer that’s excluded

The following are excluded:

• unconsumable beer (for example, sediment in cask conditioned beer) on which duty was not charged is ineligible for relief

• diluted beer is ineligible (unless we approved the addition of water)

• adulterated beer (that is, beer containing additions which we have not approved) is ineligible

• where no satisfactory audit trail is available

If any beer becomes spoilt more than 3 years after the duty was paid on that beer, you cannot claim relief.

20.10 How to identify ineligible beer

You should satisfy yourself that the beer returned is the same beer which was in the container at the time it left duty suspension. The contents of any containers suspected of containing diluted or adulterated beer, should be rejected as ineligible or subjected to laboratory testing.

20.11 The percentage of containers you should sample for laboratory testing

If you take samples from all containers for laboratory sampling, you will be able to identify and exclude all ineligible beer from spoilt beer claims.

If you do not sample 100% for laboratory testing, you should establish a sampling plan which should be set out in a formal written procedure.

If you decide that a random sampling rate of 10% is appropriate and 5% of the containers tested are found to contain ineligible beers, then the total duty element of the claim should be reduced by 5%.

20.12 When you can destroy spoilt beer

Subject to any notice of destruction being required (read paragraphs 20.14 and 20.15), you can destroy spoilt beer at a time of your own choosing. However, entitlement to reclaim duty on spoilt beer will depend on the following conditions being met.

The following conditions have the force of law and are made under regulation 26(2) of the Beer Regulations 1993:

• a full audit trail is maintained

• requirements of other regulatory authorities are observed (for example, environmental)

• proper control practices are maintained, including appropriate action at management and supervisory levels

20.13 Additional conditions for reclaiming duty on beer destroyed away from registered premises

The following conditions have the force of law and are made under regulation 26(2) of the Beer Regulations 1993:

(a) Destructions in pub cellar:

• there must be a complete audit trail which confirms the beer has been destroyed and that it was duty paid

• the destruction of the beer must be supervised by a responsible representative of the brewery, for example, an ACR — the ACR must be appointed by the brewery as an ACR in their records and be trained in that brewery’s requirements. This condition also applies to an ACR who supervises destructions for more than one brewery

The requirements of other regulatory authorities must be observed.

(b) Destructions at specialist destruction sites:

• there must be a complete audit trail which confirms the beer has been destroyed and that it was duty paid

• the destruction of the beer must be supervised by either an ACR of the brewery, or a person within the specialist destruction company who has been appointed by the brewery to supervise the destruction on their behalf. This person must be at management or supervisory level

• a certificate must be obtained from the company as evidence of destruction

(c) Spoilt beer relief will depend upon there being evidence of a full credit of the duty paid value, or replacement of the goods to your customer (or owner of the goods at the time they became spoilt)

20.14 Notice of destruction

You can destroy the beer whenever you want. However, there can be circumstances where we require prior notification. If this is the case, an officer will contact you and the requirements in paragraph 20.15 will apply.

20.15 The notice you must give

If notice is required, you must give us at least:

• 2 working days notice if you want to destroy beer in your registered premises

• 5 working days notice if you want to destroy beer outside your registered premises

You must give details of the proposed method of destruction.

Working days excludes Saturdays, Sundays and public holidays.

20.16 How you must destroy spoilt beer

You must destroy the beer in a way acceptable to us and which makes it unsaleable as a beverage.

20.17 Budget changes

When the duty rate changes, separate entries must normally be made in the spoilt beer record for beer charged with duty at the old and new rates.

However, we do not object to bulking of beer at 2 rates in one destruction, so long as a system to apportion the total has been agreed in advance with our officer. In these circumstances, only one entry on the spoilt beer record is necessary for the destruction.

20.18 How long you must keep your records for

Normally you must keep your records for 6 years from the date that the relief is claimed. However, if you want to destroy them earlier contact the excise enquiries team for our approval.

20.19 Particulars of the spoilt beer record

When beer is either returned to the brewery for destruction or reprocessing or destroyed remotely, you must enter the following particulars in the destruction or reprocessing sections of your spoilt beer record:

• the total volume of spoilt beer destroyed or beer reprocessed

• the strength of the spoilt beer destroyed or beer reprocessed

• the date and time of the destruction or when beer was returned for reprocessing

• the place and method of destruction

These requirements are provided for under regulation 30(1) of the Beer Regulations 1993.

• evidence that the duty has been charged or paid

• evidence of the amount of duty charged or paid

These requirements are provided for under regulation 33(1)(b) of the Beer Regulations 1993.

In addition, the following requirements have the force of law and are made under regulation 33(1)(a) of the Beer Regulations 1993:

• the volume and strength of the beer in each container from which the spoilt beer was directly destroyed or in which the beer was returned for processing

• the description of the beer returned by each purchaser in respect of which a claim is made

• the name and address of each purchaser

• the numbers and sizes of each container in which the beer was returned by each purchaser returning the beer

Unless we allow a longer period, your spoilt beer record must be completed within one hour of reprocessing taking place.

When kegs are returned to the brewery and residues removed for destruction, if you want to reclaim previously paid duty, you must enter the following particulars in the destruction section of your spoilt beer record:

• the total volume of keg residue destroyed

• the strength of the keg residue destroyed

• the date and time of the destruction

• evidence that the duty has been charged or paid

• evidence of the amount of duty charged or paid

Residues from returned kegs which contained low, standard or high strength beers must be physically segregated and decanted into separate vessels and accurately measured to determine the quantity for relief. HMRC will not accept estimations for duty reclaim purposes. Residues from kegs returned from export do not qualify for this relief.

Residues are not considered to be spoilt beer and, as such, they do not meet the provisions for spoilt beer relief under the Beer Regulations 1993. However, as a concession and for administrative purposes, residues can be entered in the spoilt beer record and duty can be claimed, along with duty on spoilt beer, on the Beer Duty return (EX46). Alternatively, and subject to certain conditions, provision is also available for reclaiming duty on keg residues under the Excise Goods (Drawback) Regulations 1995.

At the end of the accounting period, total the entries in the spoilt beer record of all destroyed and reprocessed beer and transfer the total to your Alcohol Duty account for claiming relief in your Beer Duty return (EX46).

21. Return of duty paid beer to duty suspension and co-storage of duty paid and duty suspended beer

21.1 You cannot return duty paid beer to duty suspension

Unless duty paid beer is spoilt and comes back for reprocessing it cannot be returned to duty suspension. For more information, read paragraph 20.4.

21.2 What happens if duty paid beer is returned to registered premises because of a failed delivery

If duty paid beer is returned to your registered premises because a customer is unwilling or unable to accept a delivery or an erroneous delivery has been made, the beer must be separately identified from duty suspended stock in your records. As duty will have already been accounted for on the beer when it was initially dispatched, your records will not need adjusting either when the beer is returned or when it is subsequently redelivered.

21.3 If your accounting system cannot distinguish between beer held in duty suspension and duty paid beer returned to registered premises because of a failed delivery

If you’re unable to modify your accounting system to overcome the problem, you can adopt the following procedure:

• set up a failed delivery account — enter the following information into the account for each failed delivery returned to your registered premises

• the date the beer was returned and the reason

• sufficient information to identify the original dispatch of the beer in your records

• the amount of duty involved

When beer returned because of failed deliveries is subsequently redelivered, charge it with duty in the normal way.

When all beer returned on a particular day because of failed deliveries has then been redelivered, credit yourself with the duty in the failed delivery account for the day of return (this credit will offset the second duty charge).

For example, if there were 3 failed deliveries during the accounting period and the total duty charge was £1,200.50, you would credit yourself with that sum from the failed delivery account at the end of the accounting period provided all the beer had been redelivered and duty recharged.

This procedure can be used only for genuine failed deliveries if your accounting system cannot distinguish between them and beer held in duty suspension. In cases of doubt or difficulty, you should contact the excise enquiries team.

21.4 If there’s a duty rate change between the date beer is returned because of failed deliveries and the date it’s then redelivered

You must make an appropriate adjustment of the duty when you credit yourself from the failed delivery account. If, in the example in paragraph 21.3, the duty rate increased by 6% before the beer was redelivered, you would increase the £1,200.50 by 6% (£72.03) and credit yourself with £1,272.53 once you had redelivered and charged duty at the new increased rate.

21.5 Storing duty paid beer and duty suspended beer

Beer on which any duty due has been paid can, subject to certain conditions, be co-stored with duty suspended beer in your registered premises. Beer could either be received duty paid or have duty paid on them while held in your registered premises. No physical segregation of duty suspended and duty paid beer is necessary. The change of status of any beer from duty suspended to duty paid must be recorded and the products clearly identified in your records.

Duty paid beer cannot revert to duty suspended status and duty suspended beer cannot be shown as duty paid without prior payment of duty.

22. Removing alcohol from beer

22.1 If you want to remove alcohol from beer

You must get our approval before you intend to start the process.

You must write to the excise enquiries team.

The alcohol produced from de-alcoholisation processes or extracted from yeast (other than that produced by traditional yeast pressing) is classified as spirits.

22.2 Dealing with the extracted alcohol

The extracted alcohol can be:

• destroyed

• delivered for vinegarisation

• used to produce other alcoholic drinks

If you intend only to destroy or deliver it for vinegarisation and you currently hold a Commissioner’s Direction allowing you to extract alcohol from beer, you need take no further action.

If you do not hold a Commissioner’s Direction or you intend to reprocess the alcohol, read paragraph 22.3.

22.3 Requirements needed if you want to reprocess the extracted alcohol

As the alcohol you’ve extracted is classified as spirits, you must:

• be licensed as a distiller

• hold a distiller’s warehouse approval

• comply with the appropriate requirements of the Spirits Regulations 1991

When alcohol extracted from beer (for example, waste or surplus beer) is re-introduced to beer products (where the spirits form a replacement source of alcoholic strength), the resulting product is classified as spirits and will be liable to a higher rate of duty, unless treatment of such a mixture is as described in the 2 instances in paragraph 19.4.2. You will also require a compounder’s licence to manufacture such mixtures.

If you want to produce other alcoholic drinks using the extracted alcohol, you can need to obtain additional approvals. You will need to contact the excise enquiries team who will advise you accordingly.

23. Exports of beer

23.1 Procedures you must follow to export duty suspended beer

You must follow the procedures set out in receive goods into and remove goods from an excise warehouse (Excise Notice 197) when you’re exporting beer.

You can also check if you need to declare goods you bring into or take out of the UK.

23.2 Customs declarations to use

You must complete and Export Declaration. Find information and guidance in the Tariff volume 3 parts 1 and 2.

23.3 Getting evidence of export

Providing the correct procedures have been followed for exports using EMCS, HMRC will send you a report of export through EMCS which discharges the movement. Where no report of export is given for any reason, HMRC will issue a report of rejected export (an IE 839 message). On receipt of an IE839 message, you may be requested to provide alternative evidence of export as shown in receive goods into and remove goods from an excise warehouse (Excise Notice 197).

23.4 Exports of duty paid beer — claiming drawback

Drawback is a relief that provides for the repayment of excise duty paid on goods that have not and will not be consumed in the UK.

To reclaim the duty paid on beer you export, you must observe the conditions of the drawback system in Excise duty drawback (Excise Notice 207).

Registered brewers and packagers should offset the amount of drawback claimed during the accounting period by completing box 28 on their Beer Duty return (EX46). The claim should be for completed movements only and supported by the necessary documentary evidence as required by Notice 207.

24. Removals of beer from registered premises in Northern Ireland to EU countries

The following section applies only to Northern Ireland

24.1 What beer you may remove to EU member states

You may remove duty-suspended beer or duty-paid beer to EU member states.

24.2 The procedures are different

The procedures and requirements are totally different.

24.3 The procedures you must follow to remove duty-suspended beer to EU member states

You must follow the procedures set out in receive goods into and remove goods from an excise warehouse (Excise Notice 197) and these include the following requirements:

• you must have financial security (guarantee) in place, the minimum level of security for movements is £20,000

• you must make sure that you’re sending the beer to a warehouse or registered consignee which the fiscal authorities have approved to receive that type of beer

• you must access EMCS and raise an eAD before the movement starts and get an ARC that will uniquely identify the movement

• you must receive a valid report of receipt confirming that the consignee received the beer

24.4 The procedures you must follow to dispatch duty-paid beer to the EU

The duty in the EU member state of destination must be secured before the dispatch of the goods and then paid on receipt. How this is done depends on the rules in the receiving EU member state.

Unless the goods are being dispatched to a private individual (read paragraph 24.5) the goods must be accompanied by an electronic Simplified Administrative Document (eSAD), read Excise Notice 204b.

You may be able to reclaim the UK duty on the goods that you dispatched. In order to reclaim the duty, you must observe the conditions of the drawback system which are contained in Excise duty drawback (Excise Notice 207).

Registered brewers and packagers should offset the amount of drawback claimed during the accounting period by completing the duty return (EX46). The claim should be completed for movements only and supported by the necessary documentary evidence as required by Excise duty drawback (Excise Notice 207).

Drawback is a relief that provides the repayment of excise duty-paid goods that have not and will not be consumed in the UK.

24.5 You may send duty-suspended beer to a non-registered trader or private individual

If you are sending the beer direct to a non-registered trader then you must make sure that the duty is paid prior to the beer leaving your registered premises. You may be able to reclaim the duty as drawback (read paragraph 24.4).

If the non-registered trader appoints an agent who is authorised to receive duty-suspended excise goods, then the UK duty does not need to be paid. However, the movement must be submitted through EMCS with the agent showing as the consignee on the eAD.

If you are sending beer to a private individual (rather than a trader) this is known as distance selling. You must make sure that the duty is paid prior to the beer leaving your registered premises. You may be able to reclaim the duty as drawback read paragraph 24.4.

Additionally you as the seller are responsible for making sure that the duty is paid in the EU member state of destination.

More information on distant selling can be found in receive goods into and remove goods from an excise warehouse (Excise Notice 197).

24.6 Notification of cash transactions

As a registered brewer or packager you’re required to notify us if you have been paid or expect to be paid in cash for supply of duty-suspended beer exceeding £9,000 (or equivalent in other currencies). You must complete form W7 Notification of cash payments for alcohol goods or alcohol related services in duty-suspension or contact the excise enquiries team.

For information on the completion of the W7, refer to explanatory notes on the reverse of the form.

You must send the completed form to the email address shown on the W7.

If you are paid or expect to be paid in 2 or more instalments which individually are below the £9000 notification threshold but in total will exceed this amount you must also notify us on form W7 when the first cash payment is received.

Provided you have notified the transaction to us, you do not need to wait for us to respond to receipt of the W7 before removing duty-suspended beer to EU member states.

24.7 Exports of beer to non-EU countries

The procedures set out in section 23 apply in Northern Ireland for exports of beer to non-EU countries.

25. Supplies to diplomats and visiting forces within the UK

When supplying excise goods to diplomats and visiting forces within the UK, you can only remove the goods from your warehouse free of duty and VAT on presentation of completed, specific documentation.

These movements are not considered to be in duty suspension and therefore do not take place under EMCS. You must have an official authorisation for the delivery of the beer.

Find more information in VAT relief for suppliers to visiting forces (VAT Notice 431) and Excise duty drawback (Excise Notice 207).

26. Removal of goods to HM Ships and as ship’s stores

26.1 Removing beer to HM Ships

HMRC allows certain HM Ships to receive beer free from Excise (and Customs) Duty. You should treat these movements as exports, the point of exportation being the delivery of the beer to the ship.

Movements to HM Ships are not considered to be in duty suspension and, therefore, do not move under EMCS procedures. You must complete commercial documentation for the removal of beer from your premises.

You will find more information on this and the procedures to follow in receive goods into and remove goods from an excise warehouse (Excise Notice 197).

26.2 Removing beer as ship’s stores

You can remove beer from your premises to be shipped as stores on board ships within the UK.

These movements are not considered to be in duty suspension but supplied under relief and, therefore, do not move under EMCS procedures.

The ship’s master must get prior authorisation from HMRC to load new stores onto their vessel. This authorisation is granted on form stores authority for spirits and tobacco products (C945). You should ask to read a copy of this form and keep a photocopy for your records.

You must complete commercial documentation for the removal of beer from your premises. Paragraph 14.5 of receive goods into and remove goods from an excise warehouse (Excise Notice 197) gives details of the information required on the document.

You must satisfy us that the beer has been shipped as stores.

27. Imports

27.1 Duty is payable on imported beer

The rate of excise duty on imported beer is the same as that on UK produced beer. The duty is based on:

• the quantity imported

• the strength (ABV)

27.2 The procedures at importation

This notice does not attempt to explain all the procedures for imports of beer. The main questions are answered in the following sections. A summary, in the form of a table, of import procedures is at paragraph 27.13. The table details each type of importation and indicates what documents are required and where more information can be found.

27.3 Importing beer under duty suspension

Payment of duty can be suspended in the following circumstances:

• if you’re a registered brewer or packager importing the beer directly into your registered premises, providing they are registered to receive beers of the relative class or description, or

• the imported beer is delivered directly to an excise warehouse approved for the receipt of beer

27.4 When duty is due on beer imported under duty suspension

If you’re a registered brewer or packager and you import beer which is delivered directly to your registered premises, you will not have to account for the duty until such time as the beer ceases to qualify for duty suspension — read section 9.

27.5 Procedures for duty suspended importations

The following paragraph applies only to Northern Ireland

Any Customs Duty must be paid at importation (unless placed under a customs suspensive regime, for example consigned to an approved customs warehouse). There is no requirement to provide a receipt to the consignor, but you should retain your supplier’s invoices and a copy of the Import Declaration.

Upon payment of any Customs Duty at point of entry into the UK, all movements must be submitted through EMCS. A registered consignor (which must be the import agent or yourself as the receiving registered brewer) must start the movement to the registered premises on EMCS.

Details of each consignment must be entered in your records for the receipt of beer under duty suspension — read section 9 and receive goods into and remove goods from an excise warehouse (Excise Notice 197). More information and guidance is contained in the Tariff, Volume 3 parts 1 and 2.

If you decide to pay the excise duty at the place of importation, EMCS procedures will not apply.

If you have type C or D approval (read paragraph 3.3) and wish to import beer from outside the UK to your registered premises, you will need a CHIEF approval number to quote in Box 49 (warehouse ID) of the import entry (SAD). If you do not already have a CHIEF number, contact: nru.alcohol@hmrc.gov.uk.

CHIEF is being replaced by the Customs Declaration Service (CDS).
Import declarations must now be made through this service.

27.6 The procedures for duty-suspended importations from countries outside the UK or EU

The following paragraphs apply only to Northern Ireland

Any Customs Duty must be paid at importation — unless placed under a customs suspensive regime, for example consigned to an approved customs warehouse. There is no requirement to provide a receipt to the consignor, but you should retain your supplier’s invoices and a copy of the Import Declaration.

Upon payment of any Customs Duty at point of entry into the UK or EU all movements must be submitted through EMCS. A registered consignor (which must be the import agent or yourself as the receiving registered brewer) must start the movement to the registered premises on EMCS.

Details of each consignment must be entered in your records for the receipt of beer under duty-suspension — read section 9 and receive goods into and remove goods from an excise warehouse (Excise Notice 197). More information and guidance is contained in the Tariff, Volume 3 parts 1 and 2.

If you decide to pay the excise duty at the place of importation, EMCS procedures will not apply.

27.7 The procedures for duty-suspended importations of beer from EU member states

The following paragraph applies only to Northern Ireland

As a registered brewer or packager, your registered premises will be a tax warehouse and you can receive beer, duty-suspended.

All movements of beer from EU member states must be submitted through EMCS. This procedure is explained fully in Notice 197.

The details of the consignment must then be entered into your records for the receipt of beer under duty-suspension — read section 9.

27.8 Receipts for received goods

The following paragraph applies only to Northern Ireland

You must provide the consignor in the EU member state of dispatch with a report of receipt, using EMCS, within 5 days of receiving the beer at your registered premises.

27.9 If you do not qualify to hold goods in excise duty-suspension

When the beer is imported the duty must be accounted for immediately.

The following paragraph applies only to Northern Ireland

If the beer comes from an EU member state, then more information on these procedures may be obtained from Notices 203a and 204a.

27.10 How to receive beer that has been duty-paid in an EU member state

The following paragraph applies only to Northern Ireland

When receiving beer that has been duty-paid in an EU member state, you must use the appropriate UK duty-paid movement scheme. You must notify HMRC of the movement and secure or pay the UK duty before the goods are dispatched. Full details are available in Excise Notice 204b.

27.11 Excise warehouses

Beer can be deposited in an excise warehouse on importation, provided that the warehouse is authorised to receive packaged or bulk beer as appropriate.

You’ll be able to check this through the National Verification Centre who has access to the community wide list of authorised tax warehouses.

Email: nvcglasgow@hmrc.gov.uk

Receive goods into and remove goods from an excise warehouse (Excise Notice 197) has more information about warehousing.

27.12 Importing beer concentrate

If you want to import beer which has been subject to a concentration process, you should establish duty liability before importation. The concentration process is often distillation which could mean that the concentrate will be classed as spirits for duty purposes, liable at a higher rate than beer.

If you intend to import beer concentrate you should contact the excise enquiries team before you start.

27.13 Specific information needed on import documents

In addition to the general information required on the various import documents, the following specific detail is needed in respect of beer:

• the total volume actually imported in litres

• the alcohol by volume expressed as a percentage to 0.1% (for example, 4.2%)

• if the beer meets the requirements of the UK reduced rates scheme, a certificate of the previous year’s production of the producing brewer — read paragraphs 8.22 and 8.23

27.14 If you do not know the ABV

It is your responsibility to make sure that a full and accurate declaration is made. If you do not know the ABV of the beer, either:

• ask the supplier for it and request that it is, in future, provided on the containers or accompanying invoices, or

• request our permission for you to sample the beer for analysis in advance of the full declaration

In the latter case, you should write to our officer at the place of importation advising:

• your full name and address

• the location of the beer to be sampled

• all other details needed to identify the beer

You should be aware that if you under-declare the ABV of the imported beer, you’ll have to pay any additional excise duty. Additionally, you can be prosecuted for any false declaration and the beer can be liable to forfeiture.

27.15 Beer can be cleared in advance of sample results

But only if you:

• pay a deposit to cover any additional duty based on the declared ABV, plus 0.5%

• agree in writing to pay any additional duty due if the sample result reveals a higher ABV

27.16 HMRC can want to take samples

Our officer may want to examine and sample the beer. It is your responsibility to provide all the facilities necessary to examine packages and containers. This is particularly important with beer under pressure in kegs or bulk containers.

27.17 Import procedures for Great Britain (England, Scotland and Wales)

Imports by registered brewers and packagers to:

• registered premises need an import declaration and an eAD — read paragraph 27.7 of this notice for more information
• an excise warehouse need an import declaration and an eAD — read Receive goods into and remove goods from an excise warehouse (Excise Notice 197)
• a customs suspensive regime need an import declaration — read the relevant notice for the customs regime declared for more information

Imports by non-registered persons to:

• excise warehouses need an import declaration and an eAD — read Receive goods into and remove goods from an excise warehouse (Excise Notice 197) for more information
• non-registered premises need an import declaration and to pay HMRC duties (and VAT) at importation — read the UK Trade Tariff for more information
• a customs suspensive regime an import declaration — read the relevant notice for the customs regime declared for more information

27.18 Import procedures for Northern Ireland

The following paragraph applies only to Northern Ireland.

Imports by registered brewers and packagers from EU countries to:

• registered premises need an eAD (submitted through EMCS) — read Receive goods into and remove goods from an excise warehouse (Excise Notice 197) for more information
• an excise warehouse need an eAD — read Receive goods into and remove goods from an excise warehouse (Excise Notice 197) for more information
• a non registered premises need an eAD — Read Excise Notice 203a: registered consignees for more information

Imports by registered brewers and packagers from non-EU countries to:

• registered premises need an import declaration and an eAD — read paragraph 27.7 of this notice for more information
• an excise warehouse need an import declaration and an eAD — read Receive goods into and remove goods from an excise warehouse (Excise Notice 197)
• a customs suspensive regime need an import declaration — read the relevant notice for the customs regime declared for more information

Imports by non-registered persons from EU countries to:

• an excise warehouse need an eAD — read Receive goods into and remove goods from an excise warehouse (Excise Notice 197) for more information
• a non registered premises need an eAD — Read Excise Notice 203a: registered consignees for more information

Imports by non-registered persons from non-EU countries to:

• registered premises need an import declaration and an eAD — read paragraph 27.7 of this notice for more information
• an excise warehouse need an import declaration and an eAD — read Receive goods into and remove goods from an excise warehouse (Excise Notice 197)
• non-registered premises need an import declaration and to pay HMRC duties (and VAT) at importation — read the UK Trade Tariff for more information
• a customs suspensive regime need an import declaration — read the relevant notice for the customs regime declared for more information

28. Accounting for VAT

28.1 Where to find information about VAT

The following paragraphs give a brief summary of the treatment of beer entered into, supplied within and removed from registered premises or excise warehouses. You can get more information if you contact the excise enquiries team.

General information on VAT can be found in VAT guide (VAT Notice 700).

28.2 Beer you produce and supply duty paid to customers

If you produce beer in duty suspense in your registered premises and you supply it duty paid to customers, you must account for VAT as output tax on your VAT Return.

28.3 The value for VAT you must use

The value for VAT is the duty inclusive price you charge your customer.

28.4 Beer you supply in duty suspension to other registered premises or excise warehouses

Any supply of UK produced beer within the warehousing regime (that is, supplies of beer in duty suspension from one registered premises to another or from registered premises to an excise warehouse approved to receive beer) is disregarded for VAT purposes under the VAT Act 1994, sections 18(2) and (3).

28.5 Beer you receive in duty suspension from other registered premises or excise warehouses

If you receive beer in duty suspension from other registered premises or excise warehouses and you supply the Beer Duty paid to customers, you must account for VAT on both the purchase and supply of the beer.

VAT becomes due only when beer is removed from registered premises or excise warehouses to home use and is normally payable together with any suspended duty by the person who removed the goods. This means that the last holder of the beer in duty suspension, who is not necessarily the owner, accounts for and pays (or defers) the VAT on the beer together with the excise duty when the goods are removed to home use.

28.6 How to account for VAT

You account for VAT on the purchase of the beer on form Declare VAT due on alcoholic beverages (EX46(VAT)) supplied under VAT Act section 18.

28.7 When to account for the VAT on the purchase of the beer

You account for the VAT at the end of the period in which you remove the goods from your registered premises.

28.8 The value for VAT of these purchases

The value for VAT is the cost of the beer to you plus the duty.

28.9 How to reclaim the purchase VAT

You should check the send a VAT Return to find out how to reclaim the purchase VAT as input tax.

28.10 The evidence you need to reclaim the purchase VAT

If you’re the owner of the goods you will be issued with a VAT certificate (C79) during the month after payment of the VAT on the form Declare VAT due on alcoholic beverages (EX46(VAT)). The C79 is the official evidence you need to claim VAT paid on warehouse removals as input tax.

Where postponed VAT accounting has been used to account for the import VAT you should retain the evidence of the payment of the VAT to make any reclaim. The payment and the reclaim should be on the same VAT Return.

If you’re not the owner but the goods were removed to home use from your registered premises, you should recover the VAT paid by you from the owner of the goods by disbursement invoice.

28.11 Imported beer received in duty suspension

If you receive beer in duty suspension at your registered premises and you supply the Beer Duty paid to customers, you must account for VAT on both the purchase and supply of the beer. The VAT on the purchase is called acquisition VAT.

28.12 How to account for the VAT

Send a VAT Return to account for acquisition VAT and supply VAT.

28.13 When you should account for VAT

You account for the VAT at the end of the period in which you remove goods from your registered premises.

28.14 How to reclaim import VAT

You should follow the procedures outlined in paragraphs 27.9 and 27.10.

28.15 How to get the EX46 (VAT) form

You can fill in and submit the form Declare VAT due on alcoholic beverages (EX46(VAT)).

28.16 Completing and sending the form

There are instructions on the form on how to complete it and where to send it to.

28.17 VAT rules are not always the same for duty suspended beer you receive for processing

Some services or processes applied to existing beer can change its nature to the extent that a new product is considered to be created. The new product is then treated as having been produced on your registered premises and any VAT that would have been due on the import, acquisition or supply before processing, is extinguished. More information can be obtained if you contact the excise enquiries team.

29. The ‘actual strength method’ of calculating alcoholic strength

The method of determining the strength of beer is described in Schedule 2 of The Alcoholic Product (Excise Duty) Regulations 2023, which is reproduced in the following section.

Method of determining the strength of beer

1.

(a) a representative sample is to be taken and, after first being cleared of sediment and gas by filtration, a definite quantity thereof by measure at the temperature of 20 degrees Celsius is to be distilled

(b) the distillate is to be made up at the temperature of 20 degrees Celsius with distilled water to the original measure of the quantity before distillation

(c) the strength of the distillate made up in accordance with subparagraph (b) is to be ascertained by determining its density in air at the temperature of 20 degrees Celsius by means of pycnometer and,

(d) the strength of alcoholic product is to be the percentage of alcohol by volume in the table entitled ‘Laboratory Alcohol Table’ which corresponds to the density determined in accordance with paragraph (c) except that where the density so determined is between 2 consecutive numbers in the table aforesaid the strength shall be determined by linear interpolation

2.

Where the result ascertained by the method specified in sub-paragraph (1) above is rendered inaccurate by the presence of substances other than alcohol that method shall be adjusted in such manner as can be approved for the purpose of producing an accurate result

‘Laboratory Alcohol Table’ means a table entitled ‘Laboratory Alcohol table’ showing the relation between density at 20 degrees Celsius and alcoholic strength of mixtures of ethanol and water expressed as percentage by volume at 20 degrees Celsius and percentage mass. Find a copy of the laboratory alcohol table for working out alcohol content.

30. Calculating alcoholic strength

30.1 With no or minimal laboratory facilities

If you have no or minimal laboratory facilities, you may calculate the alcoholic strength of your beer by multiplying the number of degrees by which the beer has attenuated by a factor. In order to make sure that your calculations are accurate, it is essential that the original gravity (OG) be established as soon as possible after collection and before fermentation commences, which will normally be within one hour of completion of filling the fermenting vessel.

If you add priming sugar to promote secondary fermentation you’ll need to calculate the alcoholic strength of the finished product as outlined in section 31.

30.2 Method to work out alcoholic strength

1. Measure the OG within one hour of collection*

2. Wait until fermentation is completed — for cask-conditioned beer this will be after secondary fermentation in the casks, then

3. Measure the present gravity (PG) (also known as the specific or final gravity)*

4. When you’ve taken your readings, calculate the alcoholic strength using the formula, (OG — PG) × f = a% ABV, where:

• OG is the original gravity of the beer

• PG is the present gravity of the beer

• a is the beer’s alcoholic strength

• f is the factor connecting the change in gravity to alcoholic strength — the value of ‘f’ is not constant because the yield of alcohol is not constant for all fermentations — in lower strength beers, more of the ‘sugars’ available for fermentation are consumed in yeast reproduction than in producing alcohol — the table at 30.3, produced by the Laboratory of the Government Chemist, shows the changing value of ‘f’ depending on the alcoholic strength of the beer

*Use a suitably calibrated saccharometer adjusted for the temperature of the representative sample.

30.3 Value of factor ‘f’ for various alcoholic strengths

(OG — PG)	% ABV	Factor
Up to 6.9	Up to 0.8	0.125
7.0 — 10.4	0.8 — 1.3	0.126
10.5 — 17.2	1.3 — 2.1	0.127
17.3 — 26.1	2.2 — 3.3	0.128
26.2 — 36.0	3.3 — 4.6	0.129
36.1 — 46.5	4.6 — 6.0	0.130
46.6 — 57.1	6.0 — 7.5	0.131
57.2 — 67.9	7.5 — 9.0	0.132
68.0 — 78.8	9.0 — 10.5	0.133
78.9 — 89.7	10.5 — 12.0	0.134
89.8 — 100.7	12.0 — 13.6	0.135

The table indicates that for the majority of popular UK beers, the factor for calculating the estimated strength would lie in the range 0.129 and 0.130. For strong beers (exceeding 6% ABV), the factor would be in the range of 0.131 — 0.133. Whilst it is important that the correct value for ‘f’ is used, you should be aware that this table is primarily for your guidance. Some brewing methods and materials can affect the factor. If in any doubt you should get more advice.

31. Calculation of ABV when priming sugar is added to beer

If you add priming sugar at the maturation stage to promote a secondary fermentation and use the calculation method to ascertain the ABV of the finished beer, you’ll need to make calculations based on the following steps.

A barrel contains 163.6 litres which comprises 161.6 litres of beer which had an OG of 1040 and 2 litres of added priming sugar with an OG of 1110. The final gravity of the mixture after secondary fermentation is 1010.

1. Calculate the ABV of the fermented beer using the formula, (OG - PG) × f = a% ABV, where:

• OG is the original gravity of the beer

• PG is the present gravity of the beer (that is, final gravity after all fermentation has ceased)

• a is the alcoholic strength

• f is the factor connecting the change of gravity to alcoholic strength (1040 - 1010) × 0.129 = 3.8

2. Calculate the ABV of the priming sugar using the same formula, (1110 - 1010) × 0.135 = 13.5

3. Calculate the ABV of the contents of the container using the formula, (Vb × Sb) + (Vp × Sp) divided by Vm = Sm, where:

• Vb = volume of beer in the container

• Sb = ABV of the beer in the container

• Vp = volume of priming’s in the container

• Sp = ABV of priming’s in the container

• Sm = ABV of the container contents

• Vm = volume of container contents

• (161.6 × 3.8) + (2.0 × 13.5) divided by 163.6 = 3.9185

31. Yeast slurry

31.1 What is yeast slurry

Yeast slurry is a waste product generated during the brewing process. It usually contains between 4 and 8% alcohol by volume.

31.2 Yeast slurry can be liable to duty

Although yeast slurry contains ethyl alcohol, it’s classed as destroyed and duty is not charged on the ethyl alcohol contained in it, if it’s sent to be used as livestock feed. However if ethyl alcohol is extracted from the yeast slurry, the ethyl alcohol will be liable to spirits duty.

31.3 Yeast slurry record

The following requirements have the force of law and are made under regulation 6 of the Revenue Traders (Accounts and Records) Regulations 1992

To allow relief from payment of duty on yeast slurry, you must keep a record showing the following information:

• the amount of yeast slurry produced

• details of any yeast slurry removed to be used as livestock feed, including

• the amount of yeast slurry removed

• the name and address of where the yeast slurry is sent to

• date the yeast slurry is removed from the brewery

• details of any yeast slurry removed to a distillery, including

• the amount of yeast slurry removed

• the name and address of the distillery

• date the yeast slurry is removed from the brewery

• details of any yeast slurry used for any other purpose, including

• the amount of yeast slurry removed

• the name and address of where the yeast slurry is sent to

• date the yeast slurry is removed from the brewery

• details of the use to which the yeast slurry is put

32. The due diligence condition

32.1 What due diligence is

Due diligence is the proper reasonable care a company exercises when entering into business relations or contracts with other companies, and how it responds in a deliberate, reflexive manner to trading risks identified.

For information on due diligence, read Excise Notice 2002: Alcohol Wholesaler Registration Scheme.

33. Review and appeal procedures

33.1 If you disagree with any decision we make about your affairs

When we make a decision that you can appeal against, we will tell you and offer you a review. We will explain the decision and tell you what you need to do if you disagree.

For example with:

• the amount of an assessment

• the issue of a civil penalty

• a decision specifically connected to the relevant duty

You’ll usually have 3 options. Within 30 days you can:

• send new information or arguments to the officer you’ve been dealing with

• have your case reviewed by a different officer

• have your case heard by an independent tribunal

A review will be handled by a different officer from the one who made the decision. If you prefer to have an independent tribunal hear your case, you must write directly to the Tribunals Service.

33.2 The time limit to ask for a review

If you want us to review a decision, you must write to the person who issued the decision letter, within 30 days of the date of that letter. We will complete our review within 45 days, unless we agree another time with you.

You cannot ask the tribunal to hear your case until the 45 days (or the time we agreed with you) has expired, or we’ve told you the outcome of the review.

If you are not satisfied with the review’s conclusion, you have 30 days within which to ask the tribunal to hear your case.

If we cannot complete our review within 45 days, or any time we agreed with you, we will ask you whether you’re willing to agree to an extension so that we can complete the review. If you do not agree to an extension, the review is treated as concluding that the decision being reviewed is upheld.

We’ll write and tell you this, you then have 30 days from the date of that letter to ask the tribunal to hear your case.

33.3 What you must include in your request for review

Your request should set out clearly the full details of your case, the reasons why you disagree with us and provide any supporting documentation. You should also state what result you expect from our review.

33.4 If you do not want a review

If you do not want a review, you can appeal to the independent tribunal. You need to send your appeal to the Tribunals Service within 30 days of the date on the decision letter.

33.5 Where you can get more information

Find out more information if you disagree with a tax decision or penalty.

34. Glossary

Term	Description
Accounting period	A calendar month, or such other period as can be authorised.
Adjacent premises	Premises not more than 5 kilometres from registered breweries or registered packaging premises.
Alcoholic strength	Ratio of the volume of ethyl alcohol contained in any alcohol product to the volume of alcohol product, including the alcohol (expressed as a percentage to one decimal place).
Attenuation	Decrease in gravity during fermentation.
Authorised warehouse keeper	Occupier or operator of a tax warehouse.
Beer	Read paragraph 2.1
Duty point	The time when the duty becomes payable, whether or not payment is deferred.
Duty suspension	An arrangement, which allows goods liable to excise duty to be produced, processed, held, received and dispatched without payment of duty.
Excise duty	The duty charged on alcohol section 46 of the Finance (No.2) Act 2023.
Excise warehouse	A place approved by HMRC under CEMA section 92 for the storage of goods on which excise duty is suspended.
Gravity	The ratio of the weight of a volume of any liquid to the weight of an equal volume of distilled water.
Hectolitre	One hundred litres.
Large pack	Containers in excess of 10 litres (casks and kegs).
Original gravity	The specific gravity of wort before fermentation.
Our officer	An officer of HMRC
Package	To put beer into tanks, casks, kegs, bottles or any other receptacles of a kind in which beer is distributed to wholesalers or retailers.
Product	A description of beer according to its brand name, package size and alcoholic strength.
Registered brewer	A person who produces beer on any premises in the United Kingdom registered under ALDA section 47(1) in respect of those premises.
Registered brewery	Any premises in respect of which a registered brewer is registered under ALDA section 47(1).
Registered holder	A packager of beer or a registered brewer registered under ALDA section 41A in relation to any registered premises.
Registered premises	A brewery or store registered under ALDA section 41A on which a registered holder can hold duty unpaid beer without payment of that duty.
Strength	Alcoholic strength.
Small Producer alcoholic products	Alcohol, other than that made under licence, produced by eligible producers in the UK or overseas. Section 53 of the Finance (No.2) Act 2023.
Small pack	Containers of 10 litres or less (bottles and cans).
Tariff	Integrated Tariff of the United Kingdom.
Tax warehouse	Premises, in which Excise goods can be produced, processed, held, received and dispatched under duty suspension. Registered premises and excise warehouses are tax warehouses.
Widget	Device inserted into cans and bottles which recreates the effect of draught beer when it is poured.

35. Small producer alcohol export declaration

Production capacity certification for the removal of small producer alcoholic product from the UK

I CERTIFY that the below mentioned alcoholic product producer (enter production premises name and address as per Brewery certificate):

XXX XXX XXX XXX

Excise number: (enter excise number as per Brewery certificate)

Departmental Trader Registration Number: (enter DTRN as per Brewery certificate)

Meets the cumulative conditions of the following criteria:

• the producer has an annual commercial production of (enter amount) hectolitres of beer.

• the producer is legally and economically independent of all other producers.

• the producer uses production equipment that is physically distinct from all other producers.

• the producer does not produce beer under licence.

Full name: …………………………

Signature: …………………………

Date: ………………..

Certification — For Official Use

I certify that the above declaration is consistent with the production records for the year ending 31 January 20XX, of the above mentioned producer.

HMRC Officer Full Name: …………………………

HMRC Address:

……………………………………………………………………………………………………………..

……………………………………………………………………………………………………………..

Signature of HMRC Officer: …………………………

Date: ………………..

Official HMRC Stamp

Your rights and obligations

Read the HMRC Charter to find out what you can expect from us and what we expect from you.

Help us improve this notice

If you have any feedback about this notice, write to:

HMRC
Alcohol Team
4th Floor
Trinity Bridge House
2 Dearmans Place
Salford
M3 5BS

You’ll need to include the full title of this notice. Do not include any personal or financial information like your VAT number.

If you need general help with this notice or have another question contact the excise enquiries team.

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If you’re still unhappy, find out how to complain to HMRC.

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