Section 2 — alcoholic products
This guide covers alcoholic products definitions and classification including how to calculate the duty. These alcoholic products definitions inform their classification.
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 flavoured beer using essences or natural flavours.
It also includes mixtures of beer with non-alcoholic drinks (for example, with lemonade to produce shandy), mixtures of beer with alcoholic products (other than spirits) where the final product strength does not exceed 5.5% alcohol by volume.
2.1.1 Classification and duty liability of beer
These mixtures are deemed to be dutiable as beer:
- 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)
Beer-based mixed drinks between 1.2% and 5.5% alcohol by volume
When beer is mixed with alcoholic (other than spirits) or non-alcoholic beverages and is of a strength not exceeding 5.5% alcohol by volume, resulting alcoholic product is classified as beer.
Beer mixed with other alcoholic product (other than spirits) or substances where the finished alcoholic product exceeds 5.5% alcohol by volume
Beer mixtures containing dutiable alcoholic product are liable at the appropriate other fermented products rate of duty.
Beer mixed with non-alcoholic product (except for flavour essences) 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 excise and gambling duties enquiries before production begins.
Beer mixed with spirits where the finished product exceeds 1.2% alcohol by volume
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 either:
- 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
- the spirits added to the product and which form 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 recognisable 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 excise and gambling duties enquiries before production begins.
In the Finance (No.2) Act 2023, cider is defined as a product which:
- is obtained from the fermentation of apple juice or pear juice
- has been produced without the addition, at any time, of:
- another alcoholic product, or
- anything, other than a permitted substance, which communicates colour or flavour
- satisfies the juice content requirements, and
- is of an alcoholic strength of less than 8.5%
‘Sparkling cider’ means cider where either:
- the container has an excess pressure due to carbon dioxide in solution of 3 bar or more
- the container has a mushroom stopper held in place by a tie or fastening – regardless of the pressure. Mushroom stopper means a mushroom-shaped stopper made of cork, artificial or plastic material (solid or hollow)
Cider is rendered sparkling if either:
- as a result of aeration, fermentation or any other process, it falls within the definition of sparkling cider
- not previously rendered sparkling, it is transferred into a closed bottle which has, or the stopper of its bottle is exchanged for, a mushroom-shaped stopper
‘Still cider’ means cider which is not sparkling.
In addition, the cider definition provides that ‘the pre-fermentation mixture satisfies the pre-fermentation requirement’ and the cider ‘satisfies the final product juice requirement.’
Pre-fermentation juice requirement
At least 35% apple or pear juice must be included in any mixture from which fermentation takes place.
Final product juice requirement
A minimum of 35% apple or pear juice must be included overall in making the final product.
2.2.1 Key features
Juice is the natural juice extract from apples or pears, but can include juice that has been diluted with water, or juice that has been concentrated or come from the dilution of concentrated juice. No other additions are allowed to juice but other ingredients may be used to make the resulting cider provided that the minimum juice content is met or exceeded in the final product.
Juice used both before and after fermentation begins must be of a gravity of at least 1033 degrees.
For the purposes of the pre-fermentation mix or for additions after fermentation has commenced it’s acceptable to dilute a higher gravity juice, to concentrate a lower gravity juice, or to add concentrated juice or a higher gravity juice to a lower gravity juice, to achieve a juice with a gravity not less than 1033 degrees.
The definition requires for both tests that a minimum of 35% of fruit juice is used with a minimum gravity of 1033 degrees. If a higher gravity juice is used then it’s acceptable to establish the volume in proportion to the 1033 minimum.
If 2 or more pre-fermentation mixes are blended, the pre-fermentation mixtures are taken as a whole for the purposes of establishing volumes and strengths. Similarly, if a cider is made by blending 2 or more ciders, the pre-fermentation mixtures for each of these ciders are taken as a whole.
The legislation and definition allow for the common industry practice of fermenting low gravity juice but, should the gravity of the juice lie below 1033 degrees, this alcoholic product does not fall within the definition of cider. It may be blended before duty becomes due with other cider to produce a final cider which meets the new juice requirements.
Gravity of the juice content
Examples provided in the annex in this section provide advice about having juice with different gravities.
2.2.2 List of permitted cider and perry ingredients
General
Apple aromas, juice and wine
Apple aromas (natural only) may only be derived from apples and must retain the typical characteristics of apples. They must only be used in the restoration of flavour rather than its enhancement.
Apple juice (fresh or concentrate) is limited to 25% if used in the making of perry.
There’s no limit on apple wine but it must only contain ingredients permitted in the making of cider and perry.
Pear aromas, juice and wine
Pear aromas (natural only) may only be derived from pears and must retain the typical characteristics of pears. They must only be used in the restoration of flavour rather than its enhancement.
Pear juice (fresh or concentrate) is limited to 25% if used in the making of cider.
There’s no limit on pear wine but it must only contain ingredients permitted in the making of cider and perry.
Vinegar
Cider vinegar is limited to the quantity necessary to adjust acidity.
Perry vinegar is limited to the quantity necessary to adjust acidity.
Ingredients with limits set by current food legislation
The following ingredients have limits set by current food legislation:
- acesulfame-K (E950)
- acetic acid
- ascorbic acid and its salts (E300 — E302)
- aspartame (E951)
- carbon dioxide
- citric acid and its salts (E330 — E333)
- dimethyl dicarbonate (Velcorin) (E242)
- lactic acid and its salts (E270, E325, E326)
- malic acids and its salts (E296, E350a, E351b, E352a)
- saccharin (and Na, K, and Ca salts) (E954)
- sorbic acid and its salts (E200, E202, E203)
- sucralose (E955)
- sulphur dioxide and its salts (E220 — E224, E226 — E228)
- salt (sodium chloride)
- tartaric acid and its salts (E334 — E336)
- water
Ingredients with no limits
The following ingredients have no limits:
- cider — out of condition
- de-alcoholised concentrated cider (Cidrasse) — must only be produced from ingredients permitted in the making of cider
- neo-hesperidine
- nitrogen
- perry — out of condition
- sugars and sugar syrups for example:
- high fructose corn syrup and high fructose syrup
- fructose hydrolysed starch and hydrolysed starch syrup
- glucose
- liquid sugars
- sucrose
- sugar
Colourings
Colourings and other substances which may impart colour may only be used to produce cider or perry in the colour range — straw, gold and golden brown.
These additives are:
- acid brilliant green BS (E142)
- anthocyanin (E163)
- caramel (E150a, E150b, E150c, E150d)
- carmoisine (E122)
- cochineal (E120)
- indigotine (E132)
- mixed carotenes (E160a, E160b, E160c, E160d, E160e)
- Ponceau 4R (E124)
- quinoline yellow (E104)
- sunset yellow (E110)
- tartrazine (E102)
Processing aids
These are materials used in the processing of cider and perry. There’re no restrictions on the use of processing aids provided they do not change or alter the characteristics of the cider or perry. Small residual traces of these aids may remain in the final product provided they do not contribute to the colour or flavour of the cider or perry.
The following are examples of processing aids:
- decolourizers such as charcoal
- enzymes such as pectinase
- filter aids such as:
- cellulose
- kieselguhr
- fining aids such as:
- bentonite
- gelatin
- isinglass
- tannin
Other miscellaneous processing aids include:
- anti-foaming agents
- calcium carbonate
- on-exchange resins
- lactic acid bacteria
- microbial nutrients other than urea and its derivatives
- yeast and yeast culture
In some ciders, yeasts and bacteria may be present in considerable numbers.
2.2.3 Classification and duty liability of cider:
Cider is considered to be another fermented product (formerly made-wine) or spirit for duty and approvals purposes if:
- it has an alcoholic strength by volume of 8.5% or more
- it contains any ingredient which imparts colour or flavour and is not listed in permitted ingredients list
If you want us to add an ingredient to the list, you may consult the National Association of Cider Makers as to the suitability of the ingredient as an additive to cider or perry. If they’re content that your proposal may reasonably fall within the Finance (No.2) Act 2023 definition of cider, submit your application along with the National Association of Cider Makers’ written endorsement. You must contact excise and gambling duties enquiries in writing.
HMRC will not approve applications for the addition of herbs or spices, or fruit juices other than apple or pear, or for flavours of any type other than those specified in the list.
In the Finance (No.2) Act 2023, wine is defined as any product obtained from the alcoholic fermentation of fresh grape or of the must of fresh grapes (whether or not the product is fortified with spirits).
2.3.1 Classification and duty liability of wine and other fermented products
Conditions or restrictions on the fortification of wine or other fermented products
You may fortify wine in your approved premises if it has been:
- produced in your approved premises
- received from another approved premises without payment of duty provided you are authorised for this
Alcoholic product producers can fortify wine in approved premises if their alcoholic products producer approval (APPA) has authorised them for this activity. Producers can equally fortify in trade facility warehouses. You must follow the general procedures set out in receive goods into and remove goods from an excise warehouse (Excise Notice 197). We’ll tell you of any restrictions or conditions on your operations or the way you conduct them.
Fortification of wine (including UK produced wine) is governed by regulations which are administered by the Department for Environment Food and Rural Affairs. It may be necessary to consult the Department for Environment Food and Rural Affairs before we can approve your application.
Mixing wine or other fermented products with beer
You can mix wine or other fermented products with beer, but only in approved premises. If the alcoholic strength of these mixtures does not exceed 5.5% alcohol by volume and does not contain any spirits they will attract the rate applicable to beer.
Mixtures exceeding 5.5% alcohol by volume that do not contain spirits are chargeable with duty as other fermented products at the rate appropriate to their strength band.
Other fermented products means products which are either:
- obtained from alcoholic fermentation of any substance, or
- obtained by mixing a product gained from the alcoholic fermentation of any substance, or anything derived from that product, with anything else but is not a beer, cider, wine or spirits.
Other fermented products will include products similar to wine but not made from fresh grape and some ‘ready to drink’ products (RTD) that are made using a fermented alcohol.
2.4.1 Classification and duty liability of other fermented products
Conditions or restrictions on the fortification of other fermented products
You may fortify other fermented products in your approved premises if it has been:
- produced in your approved premises
- received from another approved premises without payment of duty provided you are authorised for this
Alcoholic product producers can fortify other fermented in approved premises if their alcoholic products producer approval (APPA) has authorised them for this activity. Producers can equally fortify in trade facility warehouses. You must follow the general procedures set out in receive goods into and remove goods from an excise warehouse (Excise Notice 197). We’ll tell you of any restrictions or conditions on your operations or the way you conduct them.
Mixing other fermented products with beer
You can mix other fermented products with beer, but only in approved premises. If the alcoholic strength of these mixtures does not exceed 5.5% alcohol by volume and does not contain any spirits they will attract the rate applicable to beer.
Mixtures exceeding 5.5% alcohol by volume that do not contain spirits are chargeable with duty as other fermented products at the rate appropriate to their strength band.
If cider is mixed with a spirit the resulting mixture will be classified as a spirit.
In the Finance (No.2) Act 2023, spirits are defined as both:
- spirits of any description
- any mixture or compound made with spirits (including, subject to the provisions of Schedule 6 of the Finance (No.2) Act 2023, mixtures that also contain other alcoholic products)
The extraction of spirits absorbed in a wooden cask is also treated as the production of spirits.
2.5.1 Classifying alcoholic product as spirits under the UK Tariff
A fermented beverage, to which distilled alcohol has been added, will remain classified as such if it keeps its essential character. If it does not retain the character of the ferment, it must be classified as a spirituous beverage. Such mixes of fermented and distilled alcohol are not clear cut, and we would recommend obtaining an Advanced Tariff ruling from the Tariff Classification Service (read 2.6 Tariff Classification for further information).
Tests
We may carry out tests to make a decision about the proper classification of a product. Tests are carried out by a laboratory accredited by the United Kingdom Accreditation Service, approved by HMRC and in line with approved methods designed to give the most objective results. If we perform a test, you’ll need to provide us with samples of the product.
You can get information about tests and samples from the Tariff Classification Service.
Getting an Advanced Tariff Ruling for Great Britain (England, Scotland and Wales)
An Advanced Tariff Rulings is a written decision on the proper tariff classification of all Great Britain goods. It is given by HMRC on application, provided it relates to an import or export in contemplation. The application must be made to the Tariff Classification Service on form C103 and you should also provide samples of the product.
It is legally binding on HMRC and all customs authorities in the UK for 3 years from the date of issue (although in some circumstances it may be revoked or annulled before then). You’re under no obligation to obtain an Advanced Tariff Rulings and you should find it possible to work out for yourself how your products should be classified by reading the Tariff and consulting the guidance in this notice.
Getting a Binding Tariff Information for Northern Ireland
A Binding Tariff Information is a written decision on the proper tariff classification of products that are being imported into Northern Ireland. The application must be made to the Tariff Classification Service on form C103 and you should also provide samples of the product.
A Binding Tariff Information is legally binding on HMRC and all customs authorities in the EU for 3 years from the date of issue (although in some circumstances it may be revoked or annulled before then). You’re under no obligation to obtain a Binding Tariff Information and you should find it possible to work out for yourself how your products should be classified by reading the Tariff and consulting the guidance in this notice.
The tariff classification does not always govern excise duty liability and countries in the EU may apply a different rate of Excise Duty to your product.
For help and advice, contact the Tariff Classification Service.
You may be able to mix 2 or more alcoholic products together, including mixing 2 of the same type of alcoholic products. For further information read section 7 — Duty liability.
In all cases you should keep records giving the full product specification, the step-by-step manufacturing process and any labelling and marketing material as well as a clear audit trail showing how you worked out the duty liability of the alcoholic product.
This must include calculations you’ve made to decide how your alcoholic product should be classified.
These examples relate to section 2.2.1.
Gravity of the juice content
Mixture examples
Cider maker has 2 ciders that are to be mixed prior to duty becoming due. One has been produced from a minimum 35% juice content with a gravity of 1031 degrees and the other has been produced from a minimum 35% juice content with a gravity of 1044 degrees. A total volume of 150 litres of mixture is required. This method also applies to mixtures for the purposes of the pre-fermentation mixture.
Example 1
The mixture is made up as follows:
- 10 litres with a gravity of 1031 degrees
- 140 litres with a gravity of 1044 degrees
Divide the litres by the total volume of litres: (10 ÷ 150) × 1031 = 68.7
Multiply this number by the gravity: (140 ÷ 150) × 1044 = 974.4
Add the totals for each mixture to get the gravity total: 68.7 + 974.4 = 1043.1 degrees gravity
The mixture complies since it exceeds 1033 gravity.
Example 2
The mixture is made up as follows:
- 140 litres with a gravity of 1031 degrees
- 10 litres with a gravity of 1044 degrees
Divide the litres by the total volume of litres: (140 ÷ 150) × 1031 = 962.3
Multiply this number by the gravity: (10 ÷ 150) × 1044 = 69.6
Add the totals for each mixture to get the gravity total: 962.3 + 69.6 = 1031.9 degrees gravity
The mixture does not comply since it is below 1033 gravity. Once the above minimum gravity test has been achieved, the proportional 35% test must be carried out.