This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Find out about the AWRS which aims to tackle alcohol duty fraud by making the wholesale of illicit alcohol much more difficult.
The Chancellor of the Exchequer announced in his Autumn Statement 2013 the introduction of a scheme to tackle alcohol duty fraud. AWRS is expected to be introduced in legislation in the Finance Bill 2015.
Alcohol duty fraud costs UK taxpayers an estimated £1 billion each year. Organised criminal gangs smuggle, or divert, large volumes of duty unpaid alcohol into the UK, exploiting the EU-wide duty suspension arrangements. Illicit alcohol typically works its way into legitimate supply chains at the point of wholesale.
Since the launch of its ‘Tackling Alcohol Fraud’ strategy in 2010, HM Revenue and Customs (HMRC) has almost tripled the amount of revenue protected through its enforcement work to over £680 million in the tax year from 6 April 2013 to 5 April 2014. However, the threat from organised criminals isn’t reducing and tax losses remain unacceptably high.
AWRS will introduce effective control at the point in alcohol supply chains most vulnerable to organised criminal attack. The scheme will make the wholesale of illicit alcohol much more difficult and reduce the opportunity for its sale through to legitimate retailers. There are around 20,000 alcohol wholesalers in the UK and HMRC will begin to accept applications for registration for the scheme from October 2015.
All alcohol wholesalers will need to demonstrate they are ‘fit and proper’ and have their supply chains tested to make sure they are legitimate before being approved to operate in the sector, and entered onto a register.
Retailers will be required to purchase alcohol only from registered wholesalers and will be able to check whether their suppliers are registered on an online look-up facility. This will provide businesses with more certainty of the legitimacy of who they’re trading with. It will also remove the excuse of ignorance for any business who might take the risk of dealing in illicit alcohol.
HMRC will have new powers to deal with any wholesaler not registered quickly and effectively. Any alcohol goods found in the premises of unregistered businesses will be liable for seizure - whether or not the duty has been paid. Those involved will also be liable to tough penalties. In addition, any retailer purchasing from an unregistered wholesaler will be liable to penalties.
More information about the scheme will be available once the draft legislation is published later this year.
Published: 14 August 2014
From: HM Revenue & Customs