Her Majesty's Revenue & Customs (HMRC) has announced proposals for current excise alcohol law and procedures to be simplified and rationalised.
HMRC's stated plan in "pre-consultation" is to transform how businesses transact with HMRC across the alcohol taxes by:
- simplifying tax across disparate alcohol regimes
- digitising transactions in line with HMRC's digital ambition for 2020
- streamlining processes to support business growth
"Excise law is long overdue an overhaul, so the proposals are very welcome" says Alan Powell, UKWA's advisor on Excise Duty issues. "There are currently far too many different bureaucratic and often ancient obligations to trade in excise goods in different regimes, including requirements for licenses, registrations, approvals, authorisations and making entry of premises and plant. It is confusing for HMRC as well as the industry."
He continues: "Changes were planned by the government in the early 1990s but, when the Labour party came to power in 1997, the plans were dropped because there was insufficient legislative room in the new government's programme. Consequently, UK law for the approval of excise businesses and duty accounting has largely remained unaltered."
"There are now a range of significant proposals by HMRC for streamlining application processes, amendments to approvals and consistency of conditions, which is all good stuff." Alan Powell says. "One key thing to bear in mind is the suggestion that all alcohol returns and payments be consolidated."
He goes on: "Within 'production' tax warehouse regimes, brewers, cider-makers and wine-makers currently work in periods and make a single period return, whereas in the warehousing tax warehouse regime, duty has to be accounted for when products are entered for removal from the warehouse and duty has to be paid before the goods can be removed from the warehouse."
"Under deferment, the duty may be deferred for 28 days but the accounting warrants have to be entered daily, unless HMRC has approved twice-monthly 'scheduling' - which has no statutory basis and is, in effect, a 'concession'."
UKWA's CEO, Peter Ward, commented: "It is clear that the warehousing industry would welcome any changes that simplify and streamline the current process and reduce the administrative burden. The industry must consider the options and make its voice heard during the consultation process and UKWA will be taking soundings from its members to ensure that this happens."