The illegal trade in alcohol represents the biggest threat to the profitability of wholesalers in the food and drink sector. Duty-avoided beers, wine and spirits cost the Exchequer £1.2bn in lost revenue on 2013/14, and the consequent loss of trade from legitimate wholesalers to criminal gangs is recognized by our members as the highest priority among FWD’s public affairs work in Westminster.
Registration of Alcohol Wholesalers (AWRS)
Legislation was introduced in Finance Bill 2015 to require all UK based wholesalers that sell or arrange a sale of alcohol at or after an excise duty point, to be approved by HMRC. Details here.
Since January 2016 anyone trading duty-paid alcohol business to business has been required to apply for to approval under Alcohol Wholesaler Registration Scheme. The scheme will be introduced in full from 1 April 2017.
Existing and new businesses trading wholesale in alcohol will be required to submit an application for registration. They must demonstrate to HMRC that they fulfil certain ‘fit and proper’ criteria, as well as complying with new record keeping obligations and operating due diligence when making purchases, to prevent exposure to the illicit alcohol market. Additionally, wholesalers and retailers of alcohol will be obliged to purchase alcohol only from registered wholesalers.
Download FWD's Advisory Note to members - inspection regime and due diligence requirements (July 2016)
HMRC's advice for alcohol retailers (July 2016)
· HMRC is currently undertaking a fifteen month programme of assurance activity to assess whether businesses that have applied for registration meet the ‘fit and proper’ criteria.
· Applicants for registration will be inspected by HMRC. This may involve a visit to their premises.Those that pass the 'fit and proper' test will be issued with a registration number. This number has no legal status until April 2017, when the sceme comes into effect.
· Any new business which wishes to start trading must apply to HMRC at least 45 working days before they intend to operate as HMRC will assess their ‘fit and proper’ status prior to their commencement.
· Businesses which do not apply for registration may face seizure of stock or prosecution.
· On and after 1 April 2017, the obligations for those who purchase alcohol from wholesalers will come into effect. This will include retailers of alcohol as well as wholesalers purchasing alcohol from other wholesalers.
In the last few years pressure from FWD has seen successive governments increase funding to HMRC to add resources to its enforcement teams, which has led to an increase in seizures and arrests since the beginning of 2014. A 2012 consultation on measures to prevent revenue loss has resulted in the introduction of a registration scheme for alcohol wholesalers from 2017 and stringent requirements for retailers to ensure they buy from legitimate sources. We’re currently working with HMRC to design and implement a workable regime that excludes criminals from the supply chain without placing too heavy a burden on those who trade within the law.
FWD recognizes the role that alcohol plays in contributing to anti-social behaviour and health harms. However we believe these issued are best tackled by across-the–board measures that consider the supply of alcohol equally, rather than target individual products or types of retail outlets.
01/02/2017 - New alcohol checks will stop retailers paying for fraud
21/10/2016 - Wholesaler registration is the answer to record alcohol fraud figures – FWD
16/05/2016 - HMRC sets its sights on rogue wholesalers
04/01/2016 - Apply or die: HMRC challenges alcohol wholesalers to prove they play fair
23/09/2015 - Alcohol Wholesaler Registration delayed but not derailed
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