CIDER05011 - Small Producer Relief (SPR)
Small Producer Relief (SPR)
Part 2, Chapter 3 ofThe Finance (No.2) Act 2023 and Part 3, sections 10-14 of The Alcoholic Products (Excise Duty) Regulations 2023 contain the legislation for SPR.
Alcoholic products produced in, or imported into, the UK are eligible for reduced rates of Alcohol Duty under SPR if they –
- have an alcoholic strength (ABV) of less than 8.5%,
- are produced on small production premises, and
- are not produced under license
Small Production Premises:
Premises are small production premises if:
- less than 4,500 hectolitres of pure alcohol were produced on those premises in the previous production year (1 February to 31 January inclusive); and,
- less than half of all the alcohol produced on those premises in the previous production year was contained in products produced under license; and
- the brewer estimates that total production of pure alcohol for the current production year on those premises will be less than 4,500 hectolitres of pure alcohol; and
- less than half of all the alcohol produced on those premises in the current production year will be contained in products produced under license.
To Note:
- Alcohol contained in alcoholic products not eligible for the reduced
rate under SPR – for example, products above 8.5% ABV – must still be included
when working out whether the 4,500 hectolitre production limit has been reached
on any given set of premises.
- However, the production amount for any given set of premises should also be reduced to take account of any alcohol produced there, but spoilt or destroyed before the duty point.
- The ‘production year’ runs from 1 February to 31 January the following year.
-
Where premises are only used for part of the year (including premises
that begin to be used part way through a production year), the alcohol
production amount (or estimated amount) is worked out by –
- dividing the alcohol production amount (or estimated amount) by the number of relevant days of the production year, and
- multiplying the number above by the number of days in the production year the premises were used for.
- For premises which form part of a group, all the alcohol produced on all the premises controlled by that group count towards the 4,500 hectolitre limit above. So, to work out whether an individual set of premises that forms part of a group qualifies as ‘small producer premises’, the producer must include all the pure alcohol produced across all the groups’ production premises when calculating the production amount for the previous year, and must estimate the production of all the premises in the group for the current production year. For large groups, it is expected that this figure will be higher than 4,500 hectolitres of pure alcohol, and for this reason, individual premises controlled by large group producers are not expected to qualify as small production premises.
-
In exceptional circumstances, officers may accept certain alcoholic
products or quantity of alcoholic products could be disregarded when
determining –
- the alcohol production amount, or
- estimated alcohol production amount,
- Exceptional circumstances will be something outside a producer’s control that results in large scale destruction of product that has been produced and cannot be sold, for example, a global pandemic resulting in a nationwide lockdown or a fire on the production premises. We do not expect this provision will be needed very often.
- Products made under licence are not eligible for SPR. Products made under contract are however, eligible.
More information about SPR eligibility, including information about which products count as being produced ‘under licence’ vs. ‘under contract’ can be found in the SPR guidance.