Pubs trading with 'illicit' wholesalers could face 'signficant penalties', HMRC warns

01-Sep-2014 - Last updated on 02-Sep-2014 at 12:39 GMT

Licensees will be able to check whether their suppliers are registered on a new online facility

Publicans who purchase stock from unregistered wholesalers could face “significant penalties” under new legislation designed to tackle alcohol duty fraud, HM Revenue & Customs has warned.

A new scheme set to launch next year will require all wholesalers trading in alcohol to be registered under HMRC by April 2017.

The Government department has warned that there will be “significant penalties” for pubs and other retailers that purchase from “illicit” wholesalers, “to make it more difficult for criminals to distribute tax-unpaid alcohol”.

The Alcohol Wholesaler Registration Scheme will also see new powers created to deal with any wholesaler not registered: any alcohol goods found in the premises of unregistered businesses will be liable for seizure, whether or not the duty has been paid, while those involved will also be liable to “tough penalties”. The most serious and persistent offenders could face fines of more than £5,000.

Licensees will be able to check whether their suppliers are registered on a new online facility designed to provide businesses with more certainty of the legitimacy of who they are trading with and “remove the excuse of ignorance” for any firm that might take the risk of dealing in illicit alcohol.

Registration for the scheme will begin in October 2015 and all wholesalers trading in alcohol will need to be registered by April 2017.

Consultation

A spokeswoman from HMRC told the Publican’s Morning Advertiser that it will launch a technical consultation on the draft legislation, which is part of the Finance Bill 2015, this autumn.

“In the meantime, we are continuing to informally consult with industry on the detail of scheme design,” she said.

“Further information on how the penalties will work and exact levels will be available later in the year.”

The scheme was announced in George Osborne’s Autumn Statement last year. HMRC has estimated alcohol duty fraud costs UK taxpayers £1bn each year.

Ruth Corkin, VAT senior manager at James Cowper accountants, whose clients include a number of breweries, said the scheme is highly likely to affect brewers, wine merchants and distillers.

She added: “There is some confusion as to whether producers registered to pay excise duty – breweries for example – will need to register separately. That will, hopefully, be made clear when further details are announced later this year.”