Beer tax fraud inquiry: small brewers could face £14m hit over duty suspense

Speaking at the All-Party Parliamentary Beer Group inquiry into beer tax fraud, Keith Bott, chairman of the Society of Independent Brewers (SIBA), explained that because bottled beer lasts for 12 to 15 months, brewers will often package beer nine months ahead. This means that they will have to pay the duty nine months up-front.

“That would cause a major cash-flow issue,” said Bott. “It would cost in excess of £14m.”

The Government consultation proposes that all goods with a fiscal mark would be “prohibited from moving under duty suspension arrangements within the UK”. The product would have to be duty-paid at the point of shipping from the packaging company. Brewers that produce less than 200,000HL will not be required to have a stamp.

Bott added: “Most of our members carry out packaging off-site, so if they were unable to move the product under duty-suspense to those packaging facilities and back, it would pretty much wipe out small-pack for the majority of small brewers in the UK, as well as a significant number of those packaging businesses.

“If it (duty suspension) is reliant on fiscal marks, then SIBA members would be excluded.”
Bott also suggested that those beers not requiring a fiscal mark should have some sort of mark that shows they are duty-exempt.

He said: “There’s an obvious concern that retail outlets will understand what they should be looking for and expecting from their suppliers, and how that is dealt with, because it could mean that retailers choose only to buy products with fiscal marks.

“There is a relatively simple solution: that all those beers not requiring fiscal marks carry a mark saying ‘This bottle is from a brewer producing less than 200,000HL’. That would replace the fiscal mark.”

Small brewers exporting from the UK do it directly, he said, knowing who the customer is abroad. “There’s no real opportunity for a chain to exist for any of that product to return to the UK under duty suspense.”