Taxpayers and alcohol wholesalers are the victims of a growing fraud, as the amount of beer sold illegally now represents 15% of the total UK market – the highest percentage recorded by HMRC this century.
Government illicit market statistics released this week show that in 2014-15 the amount of duty-avoided spirits also soared from 6% to 12% of the market. All together, the duty losses on beer, wines and spirits amount to a £1.2bn revenue shortfall for the Government.
For members of the Federation of Wholesale Distributors (FWD) who supply beers, wines and spirits to more than 30,000 licenced shops, these figures represent a massive loss of business to criminals who sell alcohol to retailers without paying UK duty. However they believe a new scheme introduced in April next year will start the process of restoring the supply chain to responsible, legitimate distributors.
The Alcohol Wholesaler Registration Scheme (AWRS) will require licenced retailers to check that their alcohol wholesaler has been inspected and approved, using an online look-up service. HMRC is currently assessing wholesalers and issuing registration numbers. After May 1 2017, any wholesaler trading alcohol without registration will be breaking the law, as will any retailer who fails to check their alcohol source is registered.
FWD chief executive James Bielby said: “This week’s figures show just how bad the illicit trade in alcohol has become, and why we need firm action like AWRS. At the moment it’s all too easy for criminals to sell duty-avoided alcohol to unsuspecting retailers, but from next year shop owners will be able to confirm that their source is legitimate.
"For retailers AWRS is an easy way ensure they are trading within the law and to avoid the risk of having stock seized and potentially losing their licence."
FWD, which lobbied for the introduction of AWRS, has worked with HMRC to design a simple online interface where retailers can check their wholesaler is registered. Wholesalers are required to make their registration number public from April 2017.
“With extra enforcement from HMRC and the requirement of retailers to check their sources, we expect to see revenues return not only to the Treasury but to our members as well,” Mr Bielby added.
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