Notice

Wine production in the UK

Updated 25 March 2024

1. Introduction

1.1 What this notice is about

This notice is about the production, storage and accounting of duty on wine and other fermented products (previously called made-wine) by commercial wine producers.

This notice explains the effects of the law and regulations for the production, storage and accounting for duty on wine and other fermented products. For the definition of wine and other fermented products, read paragraph 2.1.

Where we say ‘wine’ in this notice, we include other fermented products, except where stated.

As this notice has technical terms, you may find the glossary helpful — read section 29.

The effects of the law and regulations covering the handling of wine in excise warehouses are explained in Registration and approval of excise goods held in duty suspension (Excise Notice 196) and Receive goods into and remove goods from an excise warehouse (Excise Notice 197).

Paragraphs 5.12, 6.2, 6.3, 11.3, 11.8, 11.12, 13.7, 13.8 and 13.13 of this notice explain record-keeping requirements and spoilt wine conditions, have force of law under the Revenue Traders (Accounts and Records) Regulations 1992 and the Wine and made-wine Regulations 1989.

1.2 Who should read this notice

This notice is primarily intended for commercial wine producers. If you produce wine solely for your own personal consumption and do not sell or receive a consideration for any of it, this notice does not apply to you.

1.3 Where to find the relevant law

You’ll find the main legal provisions relating to the production, holding and movement of wine in:

  • the Finance (No. 2) Act 2023

  • the Wine and Made-wine Regulations 1989 (Statutory Instrument 1989/1356)

  • the Alcoholic Products (Excise Duty) Regulations 2023

Other legislation may also apply to wine producers. This includes:

  • the Customs and Excise Management Act 1979

  • the Revenue Traders (Accounts and Records) Regulations 1992 (Statutory Instrument 1992/3150), which cover the keeping of records

  • the Excise Goods (Holding, Movement and Duty Point) Regulations 2010 which cover the intra Community movement and storage of goods

  • the Excise Goods (Drawback) Regulations 1995 (Statutory Instrument 1995/1046)

You can get details or copies of the Acts or Regulations from the Office of Public Sector Information.

Sometimes the law says that detailed rules on a particular matter may be set out in a notice published by HMRC. Paragraphs 5.12, 6.2, 6.3, 11.3, 11.8, 10.1, 11.12, 13.7, 13.8 and 13.13 have legal force and are indicated by being displayed in a box.

1.6 Advice

If you need advice, or any of the forms mentioned in this notice, contact the excise enquiries helpline.

2. The basics

2.1 Wine and other fermented products

In the Finance (No. 2) Act 2023, ‘wine’ is defined as ‘any product obtained from the alcoholic fermentation of fresh grapes or of the must of fresh grapes (whether or not the product is fortified with spirits’.

‘Other fermented product’ (formerly made-wine) means a product which is either obtained from the alcoholic fermentation of any substance, or obtained by mixing a product obtained from the alcoholic fermentation of any substance, or anything derived from that product, with anything else; but does not include beer, cider, wine or spirits’.

Other fermented products, for example, will include products similar to wine but not made from fresh grape and some ‘ready to drink’ products (RTDs) that are made using fermented alcohol — read section 25.

2.2 Licences and paying duty

If you produce wine for sale, you must be licensed with HMRC for duty purposes and hold a wine producer’s licence (read section 3).

Wine:

  • becomes liable to duty when it is made (that is, when its strength exceeds 1.2% alcohol by volume (ABV)) or imported — read section 5

  • can be held on or, in certain circumstances, moved between licensed premises or to excise warehouses in duty suspension — that is, without payment of duty but always remaining liable to duty.

Duty:

  • is charged on the litres of pure alcohol within the wineand in bands determined by alcoholic strength (ABV) of the wine — read section 5

  • is normally calculated by reference to the quantity and alcoholic strength stated on the package label or invoice — read sections 8 and 9

  • becomes payable when wine is released from or consumed in licensed premises or excise warehouses — read section 5

  • may also be paid on the constructive removal of wine held in duty suspense in licensed premises — read paragraph 5.12

Wine becomes liable to duty once it has been produced or passes a UK duty point this can be when it is imported into the UK — read paragraph 5.3. In the case of Northern Ireland duty may also be chargeable on wine moving from Great Britain to Northern Ireland, however you may be able to off-set any excise duty-paid in Great Britain against the charge to excise duty that arises on entry to Northern Ireland — Receive goods into and remove goods from an excise warehouse (Excise Notice 197).

2.3 How to calculate and pay the duty

You must:

  • keep records of all wine produced

  • keep records of all wine leaving licensed premises, or otherwise passing the duty point — read paragraphs 5.7and 5.12

  • calculate duty due on all wine released for UK home market use — read section 5

  • keep records of all wine destroyed

  • complete a monthly duty return and send it to the TAPS and CCL Cumbernauld Accounting Team paragraph 7.1

  • pay the duty by the due date by one of the methods described in section 7

  • keep a record of any excise duty off-set calculation you’ve made — read Receive goods into and remove goods from an excise warehouse (Excise Notice 197)

2.4 Your responsibilities

You must exercise control over your wine-making activities. Unless you do not need to be licensed (read paragraph 3.2), you must:

  • license your wine premises

  • make entry of your wine premises

  • maintain your business records to acceptable standards

  • render returns as required and pay any duty owing no later than the due date

  • comply with the requirements of this notice

You must also register for the Alcohol Wholesaler Registration Scheme if you sell duty paid alcohol to another business. It’s the responsibility of any business who purchases alcohol for onward sale or supply to check that the wholesaler they purchase from has been approved by HMRC.

Therefore, from April 2017, any business purchasing wine for onward sale or supply from you should check that you’ve been approved as an alcohol wholesaler.

To apply for approval, read Excise Notice 2002: Alcohol Wholesaler Registration Scheme.

2.5 Visits by HMRC

We’ll make visits to make sure duty is being correctly assessed and accounted for on all wine leaving licensed premises. This will be done by auditing your commercial, accounting and management control systems, and physical checks on production, stock and movements of wine in duty suspension.

2.6 HMRC checks

When we want to carry out checks, we’ll make a prior appointment. Occasionally, we may visit without appointment but the attending officer will give the reason for this. At any reasonable time, you must allow our officers access to any area of the licensed premises. You must make sure that all your security personnel are aware that we may visit without appointment. All of our officers carry identification and will show this when they arrive.

You may also be liable to penalties if you fail to apply to register with HMRC at the right time or if your monthly duty return is inaccurate — read paragraphs 3.12 and 7.7. In many cases you’ll have the right to appeal. Full details of the appeals procedure are set out in section 28 of this notice.

3. Licensing

3.1 Wine producer’s licence

If you produce or intend to produce wine for sale, you must hold an excise licence. For the purpose of this notice, this type of excise licence is known as a wine producer’s licence.

You must also be licensed if you render wine sparkling, unless you intend to carry out this process in an excise warehouse. You may produce wine and render wine sparkling on the same licensed premises.

Changes in ownership

Wine producer’s licenses will not transfer to the new owner of a business where both of the following apply. The:

  • existing licensed wine production business is to be sold or transferred as a going concern (including all assets, liabilities, and obligations)
  • sale is from one legal entity, to be carried on as a business in the name of another legal entity

For example, a sole proprietor might sell to:

  • another sole proprietor
  • a partnership
  • a limited company

The new owner must:

  • make sure that any necessary license, is in place before the sale or transfer takes place
  • where required, apply for a license

The new owner should apply at least 45 days before the date they need the license. This is the date the business changes ownership. This is unless HMRC allows otherwise.

They should apply by:

  • using form WMW1
  • providing detail of the original owner’s license

Once the original owner is aware of who the buyer will be, they should notify HMRC in writing that they intend to sell their business by contacting Excise and gambling duties enquiries.

HMRC reserves the right to ask for a different application arrangement to the one described in this notice. This may occur where HMRC is satisfied that the new owner has already passed the necessary checks to hold the license to produce wine in question. An example could be the transfer of an existing licensed wine premises between 2 different licensed wine producers. In such cases HMRC will discuss any revised arrangements directly with the new owner.

At the point that a new license applies, we will cancel those granted to the original owner before the transfer. We’ll co-ordinate with the new and original owners make sure this happens at the point that ownership changes.

New owner obligation

As a new owner, you must be licensed to produces wine as set out in this notice. If you are not licensed, then: 

  • any wine in your possession could be liable to forfeiture
  • we will assess you for any excise duty due on wine you produced or held whilst not licensed
  • we may issue you with a financial penalty for breaching licensing requirements
Changes in an approved limited company’s ownership

A limited company’s existing license will remain in force if the actual approved legal entity remains the same after a change of ownership. For example, this could occur following a complete transfer of company shares.

If we have concerns that the new owner would not meet the usual checks we would carry out on a new wine producer we will consider:

  • cancelling the existing license of the limited company
  • adding conditions and restrictions to the license to limit any new risk identified

We advise new owners to contact HMRC for advice before the change of ownership. We ask you to be ready to share existing licence information held by that company. 

If you are unsure whether you need to make a new application, contact Excise and gambling duties enquiries in advance of any sale or transfer

Changes to persons with significant control and other key persons in a limited company

In this notice, a person with significant control (PSC) is someone who holds: 

  • more than 25% of shares in the company
  • more than 25% of voting rights in the company
  • the right to appoint or remove persons from the board of directors

You must tell HMRC where there is:

  • a significant partial sale in shares, creating a new person with significant control
  • any change to directors and company officials

If we have concerns following any such, change, we will consider:

  • cancelling the existing license of the limited company
  • adding conditions and restrictions to the license to limit any new risk identified

If you are unsure whether you need to make a new application, contact Excise and gambling duties enquiries in advance of any sale or transfer.

Financial security required by HMRC

The new legal entity must make sure that any financial securities required are in place when they take over the business.

3.2 Producing wine without a licence

You may only produce wine without an excise licence if it is not for sale.

3.3 Licensed producers making wine from growers’ fruit

If you do not intend to sell the wine produced for you by a licensed producer, you can receive it without payment of duty if you give the producer a written declaration that it will not be sold.

If you intend to lease vines, you must observe the conditions in section 16.

If you’re a commercial grower, or lessee, and you intend to sell the wine produced by a licensed producer on your behalf, the producer must pay the duty on the wine when it leaves their licensed premises.

We’ll also allow you to receive your wine from the licensed producer, without them having paid any duty on the wine, provided you:

  • take out an excise licence

  • make entry of your premises

  • observe the requirements of this notice over storage

  • pay the duty due when the wine is sent out from your licensed premises

Contact the excise enquiries helpline for more information about these arrangements.

3.4 How to become licensed

To get an excise licence, complete form WMW1 and either submit it online attaching your entry of premises (read paragraph 3.6) or send it by post along with your entry of premises, as soon as possible, to:

HMRC
Excise Processing Teams
BX9 1GL

If you have a question about your application once it has been sent, contact the Excise Processing Teams (EPT). For enquiries before this stage, contact the excise enquiries helpline.

A separate licence is needed for each set of premises at which you intend to make wine. A licence will be issued in the name of the proper legal entity (sole proprietor, partnership, limited company, and so on). However, you may want to submit only one duty return for all licensed premises owned by the same legal entity — read section 7.

Wine producers applying for a licence for the first time must arrange for a guarantee to cover any duty due on wine, removed from your licensed premises to the UK home market, until it is paid to HMRC — read section 4.

For changes in ownership, check paragraph 3.1.

In some cases, it may take up to 45 days to process your application.

3.5 What you can do with an excise licence

As a licensed wine producer you can:

  • produce wine on your licensed premises

  • carry out operations and procedures in this notice, including the removal of duty suspended product to other appropriately approved UK warehouses

  • Northern Ireland based licenced wine producers can also remove duty suspended products to appropriately approved EU warehouses

  • receive wine, in duty suspense, from other appropriately approved warehouses for further processing

  • receive back, in duty suspense, your own product from other appropriately approved warehouses (that are approved to receive wine) where it has undergone further processing, for example aeration, pasteurisation and bottling

You are not allowed to receive spirits, beer, cider or imported wine in duty suspense. You are also not allowed to receive wine, not previously produced on your licensed premises, in a ready for sale state from other licensed premises or approved warehouses. You can do so if you’re a commercial grower who is licensed as a ‘wine producer’ so you can receive wine produced on your behalf by a licensed producer (read paragraph 3.3).

If you want to receive spirits for fortification or beer, cider or imported wine for use in the production of wine or other fermented products, you must apply for approval as a Trade Facility Warehouse — read section 25.

3.6 How to ‘make entry of the premises’

As part of your licence application, you must make entry of the premises you intend to use.

An entry of premises is a plan showing the position and description of each vessel or other piece of plant you intend to use in the production of wine and where the wine is to be stored. It should include any identifying marks on your vessels or plant and the full address of the premises.

A commercial grower or lessee who intends to take out an excise licence (read paragraph 3.3), must provide a plan of where the wine will be stored and the full address of the premises.

The plan must be A4 size or less and in black and white with duty suspended areas shaded. The plan should be submitted to the EPT with your application.

You do not have to make an excise entry of your premises if the wine you produce is not for sale.

Retail premises, within or attached to your licensed premises, are not considered part of the licensed premises. Any wine moved to the retail premises will have to be duty paid on removal from the licensed premises.

3.7 What happens after you apply for a licence

Your application will be vetted and is subject to background checks. If these checks do not give enough assurance that the business is suitable for licensing, more information may be requested. Until this information is received, your application will be put on hold. A visit to your place of business may also be needed.

If we accept your application, we’ll issue you with an excise licence, which will confirm the date of licensing and any conditions. You should keep the licence on the premises to which it refers and make it available to our officers on request.

Your premises will be licensed as a tax warehouse but not as an excise warehouse. Information on excise warehouses can be found in Registration and approval of excise goods held in duty suspension (Excise Notice 196) and Receive goods into and remove goods from an excise warehouse (Excise Notice 197).

If we refuse your application, we’ll inform you in writing and give our reason or reasons. We’ll offer you a review of our decision or you can appeal direct to the independent tribunal — read section 28.

3.8 Duration of licence

Your licence will last until production ends. You must tell us in writing:

  • if you intend to stop production

  • when you’ve stopped production

If you sell your business read paragraph 3.1 for more information

3.9 Stopping production

After production has stopped and your wine is finished and packaged (read paragraph 22.2), you’ll have to pay the duty due on any:

  • remaining stock in hand

  • unexplained shortages

We may also allow you to destroy the wine stock in hand as if it were unfit for sale. If you want to do this, read paragraph 11.7. However, duty must still be paid on unexplained shortages.

When we’re satisfied that you’ve accounted for all duties and or destroyed your stock of wine, we’ll cancel your licence and your entry of the premises.

3.10 Using your licensed premises for other excise trades

You can use your premises for other excise trades (for example, a compounder of spirits) if:

  • you’re licensed or registered to carry out that trade

  • you observe the requirements in the appropriate notice and any restrictions or conditions imposed by us

  • your working practices and records readily identify the particular trade being carried out in any room, vessel or piece of equipment that can be used for 2 or more trades

3.11 Changes affecting your licence

You must write to the EPT (paragraph 3.4 has the address) to tell them about changes that may affect your licence, including ending production — read paragraph 3.9.

These changes would need a new application form WMW1 and entry of premises to be submitted, changes:

  • of legal entity, for example, formation of a limited company

  • in the ownership or control of your business, read paragraph 3.1

  • to VAT status such as you become VAT registered or de-registered

It may take up to 45 working days to process your new application, so notify the EPT of any changes as soon as possible.

You must also tell the EPT about:

  • change of partner details

  • change of director details

  • change of address of your licensed premises — entry of premises would also need to be submitted

  • cessation of production

  • the production of other excisable goods on your premises

  • financial difficulties or impending insolvency

  • you becoming VAT registered or de-registered

It may take up to 15 working days to make changes to your current registration, so notify the EPT of any changes as soon as possible.

3.12 Production by unlicensed persons or on unlicensed premises

The production of wine:

  • by a person who is not licensed

  • on premises which are not licensed

is an offence for which there is a penalty. You can avoid a penalty by applying to be licensed at the correct time.

If you purchase an existing licensed business in it’s entirety, the existing licence may not transfer to you, check paragraph 3.1.

If you’ve not applied for a licence, you must tell us as soon as possible. Depending on circumstances, we may reduce the penalty. Find more information on penalties.

You have the right to appeal if we impose a penalty. For more information on appeals, read section 28 and disagree with a tax decision.

4. Financial security

4.1 Guarantees

For the purpose of this notice, financial security is a guarantee given by an approved guarantor (for example a financial institution) who will pay money to us if there is an irregularity covered by the guarantee. Guarantees are the only form of security acceptable to us.

4.2 When a guarantee is needed

Depending on circumstances, we may need a guarantee to safeguard the duty on:

  • all movements of wine between Northern Ireland and EU countries — read paragraph 4.3 and Receive goods into and remove goods from an excise warehouse (Excise Notice 197)

  • deferring payment of duty for wine which has been produced in the UK and has passed the duty point, but for which duty has not been paid to HMRC, although you may be eligible for exemption under the Excise Payment Security System (EPSS) — read paragraph 4.4

We may need a movement guarantee for movements of wine within the UK — read paragraph 4.3.

4.3 How to get a guarantee

To get a guarantee for movements of wine between Northern Ireland and an EU country or, if requested by us, for movements of wine within the UK, refer to section 10 of Receive goods into and remove goods from an excise warehouse (Excise Notice 197) and then make a request in writing and send to:

HMRC
Financial Securities Centre
BX9 1GL

Once we have agreed your guarantee amount, we’ll issue the draft wording to your guarantor for completion of the guarantee form and return to the EPT. If satisfied, we’ll accept the guarantee and return a signed copy to the guarantor. We’ll write to you to confirm the guarantee has been approved.

4.4 When you do not need a guarantee

You’ll not have to provide a guarantee if you’re eligible for authorisation under EPSS. Where an eligible business is approved for EPSS, they may defer payment of duty without providing a guarantee — read paragraphs 4.4.1 and 4.4.2.

4.4.1 Who qualifies for EPSS

To be eligible to apply for EPSS, you must have been VAT registered for 3 years or more. If so, you’ll be assessed against the full EPSS authorisation criteria which includes checks on your VAT, excise and debt compliance history.

If you’re trading beneath the VAT registration threshold, you can apply for EPSS if you’ve been registered in an excise payment regime for 3 years or more. You’ll not be assessed against the full EPSS eligibility criteria but instead checks will be made on your excise return, payment and debt compliance history.

4.4.2 How to apply to make payments without providing a guarantee

You must complete form Excise Payment Security System: application to make payments of excise duties without a guarantee (EPSS(B)).

Send the completed application form to:

EPSS Authorisation Team
Ruby House
8 Ruby Place
Aberdeen
AB10 1ZP

4.4.3 How to get a guarantee if you do not qualify for EPSS

Your guarantor must complete form Import and export: guarantee payment due using the Excise Payment Security System (C1201TAPS).

Send the completed form to:

HMRC
Environmental Taxes Team
Room ELG-03
St Mungo’s Road
Cumbernauld
Strathclyde
G70 5TR

Telephone: 03000 592 688

Your guarantee should be set at a maximum amount that is sufficient to cover all the duty likely to be due on wine removed from your licensed premises to the UK home market, in any given accounting period.

If you’re not eligible to apply for EPSS and you do not want to provide a guarantee then you can pay your duty liability up front. The payment is an annual one and you must pay a year’s estimated duty in advance. Contact the Environmental Taxes Team to make the arrangements.

Licensed wine producers who have premises that are also approved as an excise warehouse must have a separate deferment guarantee to cover any duty due on removals from the excise warehouse — unless they are eligible to apply for authorisation to make payments without providing a guarantee.

You’ll not be authorised for duty deferment unless you have a guarantee or are authorised under EPSS.

4.4.4 What will happen if you do not provide a guarantee

If you fail to provide a guarantee, you must pay the duty due when the duty point occurs, which is as soon as you despatch wine to home-use from your licensed premises, rather than delaying payment of the duty until the 15th day of the following month.

4.5 Who can be your guarantor

Only companies approved by us may act as guarantors. Most banks and insurance companies have this approval, but if you want to check a company, contact the Financial Security Centre (read paragraph 4.3).

4.6 Cost of guarantee

The cost of the guarantee is a commercial arrangement between you and the guarantor.

5. Duty rates and when duty becomes due

5.1 Temporary arrangement for calculating wine rates from 1 August 2023

HMRC has introduced an 18 month temporary arrangement for wine until 31 January 2025. This is to help the wine industry transition to the strength based system.

The temporary arrangement will affect wine with an ABV of between 11.5% and 14.5%. During this period, you must use an assumed strength of 12.5% when you work out the duty on wine.

You can find an example of how to work out duty from 1 August 2023 in section 5.10.

5.2 Where to find duty rates

The duty rates for all alcohol products are structured in bands according to the strength of the product. They are expressed in litres of pure alcohol.

Check the duty rates for wine.

5.3 Wine duty categories

The 4 duty categories for all alcohol products are:

  • 1.3% to 3.4% ABV

  • 3.5% to 8.4% ABV

  • 8.5% to 22% ABV

  • 22% ABV and above

5.4 When wine becomes liable to duty

Wine becomes liable to duty once it has been produced or when it is imported into the UK — read paragraph 5.7. For movements of wine from Great Britain to Northern Ireland refer to section 2.2 and 2.3 for information on the charge to excise duty and how to account for it.

5.5 When wine is made

Wine is deemed to be made or produced at the point during fermentation when the strength of the product first exceeds 1.2% ABV.

5.6 Wine 1.2% ABV and below

No duty is chargeable in the UK on wine that does not exceed 1.2% ABV. You must record details of the manufacturing operations in your production records. The wine may be moved using your commercial despatch documents.

If you want to produce low strength wine by removal of alcohol, you should contact the excise enquiries helpline who will advise you on revenue requirements that may affect the process you intend to use.

5.7 Passing the duty point

Paragraph 5.3 explains when wine becomes liable to duty, but duty only becomes payable when the wine passes the duty point, that is when it leaves duty suspension. Duty ceases to be suspended when:

(a) the wine leaves licensed premises, unless it is delivered:

  • to other appropriately approved premises for further processing

  • to an excise warehouse

  • for exportation

  • for shipment as stores

  • to HM Ships

  • to entitled diplomats

  • to entitled members of visiting forces

(b) the wine is constructively removed (read paragraph 5.12)

(c) the wine is lost

(d) the wine is irregularly diverted

(e) you’re no longer licensed

(f) the premises on which you’re holding the wine cease to be licensed

Wine is considered to have left duty suspension when there is a failure to comply with requirements of the duty suspension arrangements.

5.8 Duty liability

The person holding the wine at the duty point is liable for the duty.

5.9 When to pay your duty

Normally, the duty should be paid by the 15th day following the end of your ‘accounting period’ in which the wine passed the duty point — read section 7 (but also read paragraphs 4.2 and 4.4.4).

5.10 How to calculate duty on wine and other fermented products removed from a licensed winery

From 1 August 2023 Alcohol Duty is worked out based on the litres of pure alcohol in wine.

For wines of an alcoholic strength between 11.5% and 14.5% ABV, there’s a temporary 18 month arrangement which means you must calculate alcohol duty on an ‘assumed strength’ of 12.5% ABV. The temporary arrangement has been introduced to help the wine industry adjust to the new strength based calculation.

Unless HMRC has permitted the use of a different method of calculation that does not disadvantage the revenue, your calculation must be rounded to 2 decimal places. For example, £1,267.7777 would be £1,267.77.

To complete the wine, cider and other fermented products return (EX606), round down the quantity of wine to the nearest whole litre.

Example of a calculation using the temporary arrangement for wine

You have 407 containers of wine

Each container holds 3 litres of wine.

The ABV of your wine is 14%. Because it’s between 11.5% and 14.5%, you must use the assumed strength of 12.5%. This means the rate of duty is £28.50 for each litre of pure alcohol in your wine.

Work out how many litres of wine you have.

407 x 3 = 1,221 litres of wine.

Work out how many litres of pure alcohol you have.

1,221 litres x 12.5% (the ABV assumed strength) = 152.625 litres of pure alcohol.

Work out how much the Alcohol Duty is for your wine.

152.625 x £28.50 (the rate of duty) = £4,349.8125.

Work out how much Alcohol Duty you have to pay for your wine by rounding down.

£4,349.8125 rounded down to the nearest penny is £4,349.81.

5.11 What happens if you do not pay duty

If you do not pay the duty by the due date, you’ll be liable to a civil penalty of 5% of the duty or £250 — whichever is greater. More penalties may be incurred for each day that you fail to pay the duty. Details of civil penalties are contained in Excise Notice 209: civil penalties — fixed, geared and daily.

At any time after the due date for payment, our officer may take action to take possession of all wine, materials and equipment used in making wine or connected with your trade as a wine producer, which are either owned by you or are in your possession and auction them to recover duty due plus pay any Taking Control of Goods fees. Also read paragraph 2.7 of this notice.

5.12 Paying duty in advance of wine leaving licensed premises

If you think that it would help your business to account for duty on any duty suspended wine in advance of delivery from licensed premises, you may do so. This is known as ‘constructive removal’ and allows the licensed holder of the wine to change the status of the wine held on licensed premises from duty suspended to duty paid, on payment of the proper duty, without the need to remove the wine from those premises.

The duty should be paid (section 7) by the 15th of the month following the calendar month in which the wine was constructively removed.

The next 2 bullets have force of law under regulation 12A (3) of the Wine and Made-wine Regulations 1989.

You must record:

  • the date of any change of status of any wine from duty suspended to duty paid

  • the products

When wine has been constructively removed, it cannot be returned to duty suspension in licensed premises.

5.13 Duty rate changes

You’re responsible for declaring the correct amount of duty from the effective date of change. When the duty rate changes, we’ll notify you of the new rates, the effective date and the time of the change.

Check the current duty rates for wine.

When the rate changes during an accounting period, you must complete 2 separate returns for the period — one at the old rates and one at the new rates. Mark the returns pre or post budget as appropriate.

5.14 Mixing of alcoholic products

What mixing means

It means mixing 2 or more alcoholic products together. This includes mixing 2 of the same type of alcoholic products, for example 2 different brews of beer.

Mixing restrictions

You can only mix 2 or more alcoholic products together if:

  • the mixing takes place before the Excise Duty point and the products are mixed either in an excise warehouse or under a relevant alcoholic products production approval granted by HMRC, for example a wine producers licence

  • the Alcohol Duty on each product being mixed has been paid, are all the same alcoholic strength and all products being mixed are the same type, like cider or beer

  • the Alcohol Duty on each product being mixed has been paid, and that amount is equal to or exceeds the amount of duty that would, if the mixing had taken place before the Excise Duty point, have been chargeable on the resulting mix

  • the Alcohol Duty on each product being mixed has been paid, the resulting mix is intended for consumption on the premises on which the mixing takes place

Post-duty point dilution of alcoholic products

You cannot mix water or any other substance with alcoholic products on which Alcohol Duty is chargeable if the:

  • mixing takes places after the Excise Duty point

  • resulting product is intended for sale

  • mixing had taken place immediately before the Excise Duty point, the amount of Alcohol Duty would have been greater than the amount actually payable

Mixing and diluting at the point of sale

The following requirements have force of law and are made under section 86(5)(c) of Finance (No.2) Act 2023

Mixing of duty paid products for consumption on the premises must be either:

  • undertaken by the customer from the separate drinks provided

  • provided by the server at the specific request of a customer from separate duty paid alcoholic products

This allows for the provision of drinks like lager and bitter mixes or cocktails on retail premises.

Record keeping

Your own commercial records will be acceptable if they include the date of mixing and the quantity, type and alcoholic strengths of products you mix.

6. Records and accounts

6.1 General

As a revenue trader, you must observe the requirements of Excise Notice 206: revenue traders’ records. If your records do not satisfy our requirements, we may ask you to make changes.

We need you to maintain and produce for examination a record of your business activities. We may examine:

  • profit and loss and trading statements

  • management accounts and reports

  • balance sheets and trading forecasts

  • internal and external auditor’s reports

  • any record maintained for a business purpose

6.2 Records you must keep

The following 9 bullets have force of law under regulation 6 of the Revenue Trader (Accounts and Records) Regulations 1992.

You must keep records which show:

  • materials used (including additives)

  • details of processes and operations including:

    • fermentations

    • additions

    • drawing off

    • bottling and packaging

  • quantities and strength of wine:

    • produced

    • received

    • sent out from licensed premises

    • returned to licensed premises

    • constructively removed

    • lost or destroyed on licensed premises

  • samples

  • domestic consumption

  • imports

  • exports

  • receipts

  • details of any stock-takes, including details of any surplus, deficiency or other discrepancy revealed by the stock-take

Generally your normal business records will have, or can be modified to contain, the information we need.

6.3 Duty accounts

You must keep a duty account, which is a summary of the wine duty due in each accounting period.

The next 5 bullets have force of law under regulation 5(1) of the Revenue Trader (Accounts and Records) Regulations 1992.

You must keep an account which contains the following information:

  • the amount of duty on all wine that leaves duty suspension

  • the amount of duty reclaimed on spoilt wine which has been destroyed or wine which has been reprocessed

  • the amount of any underdeclarations from previous periods

  • the amount of any overdeclarations from previous periods

  • the net amount of duty due for the period and the date, and method of payment

6.4 How long to keep your records

You must keep your business records for 6 years. If this causes problems, contact the excise enquiries helpline to ask if you can keep some of your records for a shorter period. You must get our agreement before destroying any of your business records that are less than 6 years old.

6.5 Storing original documents

You can keep your records on any form of storage technology as long as copies can be easily produced and there are adequate facilities for allowing our officer to view them when required.

You should contact the excise enquiries helpline to advise them before you transfer records. You may need to operate the old and new systems side by side for a limited period of time. We may refuse or withdraw approval if any requirements are not met.

Make sure you keep your original registration certificate in a safe place.

6.6 Keeping your records on a computer

If you keep your records on a computer, we’ll need access to it so that we can check its operation and the information stored. We may ask for help from you or anyone else having charge of, or otherwise concerned with, the operation of the computer or its software.

If a computer bureau is employed, you’re responsible for arranging for the bureau to make your records available to us when we want to read them. Normally this will be at your principal place of business.

7. Accounting for and paying duty

7.1 Working out duty

At the end of each ‘accounting period’, that is:

  • calendar month

  • 4 or 5 week period (provided this arrangement is agreed beforehand with HMRC)

you must total up all the wine sent out from your premises during that period, work out the duty due, complete a duty account and transfer the appropriate totals to a monthly return — wine, cider and other fermented products return (EX606).

7.2 Where to get a duty return

The EX606 is used to declare your liability for Wine and Other Fermented Products Duty.

7.3 How to fill in your return

You must fill in your monthly duty return, EX606, with:

  • the quantity of wine in each relative duty band you sent out for home-use (or constructively removed) during the previous accounting period

  • any allowable deductions

  • the amount of duty you owe

You may only make deductions from your duty liability as outlined in this notice if we have allowed you to do so.

The EX606 has full instructions on the completion of the return.

Returns must be completed in ink and any changes must be initialled and dated by the person who signs the declaration.

7.4 What happens when you do not send a duty return

If you do not send a return on time, you’ll be liable to penalties — read paragraph 2.7. We have the authority to estimate the duty which would have been due and to pursue that debt through the civil courts — read paragraph 5.11. If you foresee problems, immediately contact:

HMRC
Environmental Taxes Team
Room B1-25
St Mungo’s Road
Cumbernauld
Strathclyde
G70 5TR

Telephone: 03000 592688

7.5 Who can sign your return

The proprietor, a partner, the company secretary or a director of the company should sign the declaration on the return. If this is not possible, you can, as one of the above-mentioned persons, authorise someone to sign the return on your behalf.

7.6 Submitting a single duty return for more than one site

If you have more than one licensed premises owned by the same legal entity, you may, on request, combine the duty liability for each in the one duty return. However, an individual duty summary should be maintained for each site and consolidated in a duty account by the site submitting the return.

If you’re approved to produce both cider and wine and other fermented products, or if you produce either products on more than one set of premises, you may, as above, combine the duty liability for both products and or premises in the 1 duty return.

7.7 How to avoid a penalty

You can avoid a penalty by checking that you’ve given complete and accurate information in your duty return. You may be liable to a penalty if your return is inaccurate and, as a result, you do not pay enough duty or if you do not notify us that a duty assessment we have sent you is too low.

If you’re aware you’ve made a mistake on your return, you must tell us as soon as possible. Depending on circumstances, we may reduce the penalty.

If you deliberately make a false duty return, you may face prosecution for the offence and incur a heavy penalty.

Find more information on penalties at HM Revenue and Customs: leaflets, factsheets and booklets.

You have the right to appeal against a penalty. For more information on appeals, read section 28 and disagree with a tax decision.

7.8 Reporting errors from earlier accounting periods

If you find under-declarations relating to previous accounting periods which total less than £1,000 duty, you must enter the amounts against lines 23 to 32 on the reverse of the EX606 as appropriate, and carry the total forward to lines 35 and 17 for the current accounting period.

Similarly, if you discover over-declarations totalling less than £1,000 duty, you must enter the amounts against lines 23 to 32 on the reverse of the EX606 as appropriate and carry the total to lines 36 and 18 for the current accounting period. You do not have to send written advice, but details of the errors must be kept for inspection.

If the total under-declaration or over-declaration is £1,000 duty or more, you must make the adjustments outlined above and then send full details in writing to the Environmental Taxes Team (paragraph 7.4 has the address) with the return.

7.9 When you should send in your return and pay duty

You must submit your return and payment so that they arrive not later than the 15th day of the month following the ‘accounting period.’ When the 15th day falls at a weekend or on a public holiday the return and payment must be received by the previous working day.

7.10 How to pay

HMRC accepts payment by various methods but recommends you pay electronically using one of the following options:

  • approve a payment through your online bank account

  • Bacs Direct Credit

  • CHAPS

  • internet or phone banking

For further information and help go to Paying HMRC, Pay Wine or Cider Duty.

A cap was introduced on 31 May 2012 by the Board of Bacs Payments Schemes Ltd (Bacs) which limits the maximum value of any single Bacs transaction. If you have a payment to make by Bacs Direct Credit which exceeds £20 million, you need to make arrangements with your own bank to make sure payment reaches HMRC on the due date, by an alternative payment method such as CHAPS.

7.11 Where to send your completed return

Licensed wine producers must send returns to:

HMRC
TAPS and CCL
Cumbernauld Accounting Team
Accounts Office
St Mungo's Road
Cumbernauld
Glasgow
G67 1YZ

7.12 Nil return

If you make no deliveries of wine to home-use during an accounting period, you must still send us an EX606 return form. Insert ‘nil’ in the quantities box, sign the return and send to us.

8. Measurement of quantity

8.1 General

We can ask for duty to be accounted for on the actual quantity of wine in each container as it passes the duty point. However, most packagers do not measure this in each container as they use the ‘average system’ of quantity control.

Under this arrangement, used widely throughout the EU, the average contents of packages must not be less than the declared contents marked on the can or bottle or label. Within specified limits, the actual contents of any particular container may be more or less than the declared contents.

Packagers using the average system conform to a Weights and Measures Code of Practice which has been agreed with Trading Standards. Packagers are obliged to monitor and record the actual quantity of wine by sampling a proportion of packages to make sure they fulfil the code’s requirement.

8.2 Duty on small pack

Small pack refers to containers of 10 litres capacity and less. When sending out wine for UK consumption from your licensed premises, you should charge duty on the quantity declared on the label of the can or bottle.

Evidence of compliance with weights and measures legislation will be sufficient to accept the labelled contents as the duty base, unless there are grounds for believing that deliberate duty avoidance is involved.

8.3 Samples

You must take samples as follows:

  • at least one sample should be taken for each production run

  • each sample must be a minimum of 5 packages

The average of the samples taken to comply with average contents rules will be treated as the quantity of wine in a container.

8.4 ‘Due care’

‘Due care’ is the term used for measures you have in place to monitor the filling process and actions you take to prevent and rectify any instances of excessive over-filling or under-filling.

8.5 Proving due care

You must monitor the filling process to make sure that the quantity put into the package does not regularly excessively exceed the amount declared on the label. You should record these checks and provide an adequate audit trail to satisfy our officer about due diligence.

Where there is evidence of consistent and excessive over-filling, more duty will be due.

8.6 When more duty needs to be paid

Duty becomes payable at the end of the accounting period in which a container of wine is delivered to home-use and then passes the duty point.

Where you’ve incurred more duty liability because of overfilling, it should be paid in the accounting period when wine is supplied to home-use from your licensed premises, or from licensed premises or Excise warehouses owned or operated by your company.

If you do not correctly record or pay the duty due on excess volume that you’ve delivered to home-use, we’ll assess how much you owe. If you cannot produce accurate records upon which the extra duty can be readily established, including quantities delivered to home-use, we’ll use ‘best judgement’.

For over-filled containers of wine supplied in duty suspension to third parties, record details of these deliveries separately in your records. The law states that the person holding the goods at the time of their delivery to home-use, is liable for the duty, including that on the volume in excess of the declared quantity. If we are satisfied that the third party was unaware that the container had been over-filled and is independent of you, we’ll not normally recover the duty. In deciding whether to pursue the extra duty, we’ll take into account:

  • the relationship between you and the third party

  • contracts of supply, if appropriate

  • the price paid for the goods

  • any other information considered relevant

8.7 When you can combine monitoring results

For small pack, you should assess the monitoring results separately for each product. In exceptional circumstances, for example, where a small amount of a seasonal product is packaged and separate monitoring would produce an inequitable outcome, we’ll consider requests for combining the monitoring results for a number of products.

8.8 Where to record volume of wine delivered

Your commercial records should be acceptable if they have enough information for calculating duty. You’ll also need to enter the total volume of wine delivered during the accounting period on the EX606 duty return — read section 7.

8.9 Why you must record the volume of wine delivered

Apart from commercial considerations, you must record the volume of wine delivered because:

  • the volume will affect the calculation of the duty

  • if the delivery is under duty suspension and subject to pilferage, an accurate assessment of the loss will be needed

  • our officers will want to be satisfied about the accuracy and completeness of your systems and the adequacy of any duty guarantees

8.10 Which method to check quantity in large pack or bulk

By ‘large pack’, we mean containers in excess of 10 litres or more.

The dutiable quantity of wine should be the actual contents found by dipping, metering or weighing.

8.11 How to deal with imports

International obligations mean we cannot treat imports any less favourably than domestic product. As importers will not necessarily be aware of the actual contents of containers, we’ll apply the same principle in paragraph 8.6.

In the case of Northern Ireland only, imports only apply to any other country outside the EU.

9. Alcoholic strength

This section applies to all alcoholic products:

  • entirely manufactured in the UK (sometimes referred to as domestically produced)

  • imported into the UK as finished products

  • imported into the UK as bulk products and bottled here

  • imported into the UK as bulk products and used as ingredients in a final product made in the UK (for example, bulk wine imported and used to make a domestically produced ‘other fermented product’)

9.1 What alcoholic strength means for duty purposes

Alcoholic strength is the percentage of alcohol by volume (ABV) in the product measured at 20°C. For duty purposes, you should round this down to one decimal place. For example, 7.59% ABV becomes 7.5% ABV.

9.2 Alcoholic strength for duty purposes

It’s mandatory for prepacked products to include the strength of an alcoholic product either:

  • directly on the container

  • on a label attached to the container

For duty purposes the labelled strength is the strength of the alcoholic products in most cases.

If there’s no label strength (for example, on a very old bottle), you must use the strength on any document relating to the container. If there is no other documentation, you should use the actual strength method (read section 9.5).

9.3 Cask conditioned products

Cask conditioned products, including bottle-conditioned products and any other unfinished products, will continue fermenting after removal from production premises. This will result in an increase in strength. You must account for duty on the strength at which you expect the product to be when it is consumed. This is also the strength which would be shown on the label or invoice or delivery note.

For duty purposes, the strength of the cask conditioned product is the greater of one of the following:

  • the final strength the product is expected to have when sold

  • the strength shown on the label of the product

  • the strength shown on any invoice related to the product

  • the strength shown on any delivery note relating to the product

  • the strength shown on any other document issued in relation to the product

9.4 Measuring strength

You can use any method to measure the strength of a product, if your chosen method produces a result equal to, or greater than that described in Schedule 2 of the Alcoholic Products (Excise Duty) Regulations 2023.

9.5 The actual strength method

This is a scientific measurement taken using the process described in Schedule 2 of the Alcoholic Products (Excise Duty) Regulations 2023. HMRC will accept any method that measures strength as long as it’s equal to, or greater than that described in Schedule 2.

9.6 Due care

This section has force of law under regulation 3(7) of the Alcoholic Products (Excise Duty) Regulations 2023.

You must take due care to make sure the strength used to calculate the duty accurately reflects the actual strength of the product. If you have not done this, the strength will be worked out using the actual strength method.

If you’re a UK producer, you must continuously monitor and record ABV results. These will normally fall randomly on either side of the target strength which will be the declared strength. The average of your results should be close to the target strength.

Occasionally the ABV can vary, but as long as you take appropriate action to return the strength of the product to within its normal specification, due care will have been demonstrated. You must keep records of action taken to maintain product strength within control limits.

For imported products, you must make sure that the ABV of your products is labelled according to any relevant labelling legislation. For example, the provisions in Annex XII of the Food Information to Consumers Regulation or (for wine of fresh grape) Article 44 of EU Regulation 2019/33 (as far as these apply as retained EU law).

Your commercial due diligence should make sure that the:

  • products you import conform to legal specifications
  • ABV on the label conforms to the tolerances specified in the relevant labelling rules for each product category

For cask conditioned products, in addition to these actions, you must regularly monitor and record the actual strength of a quality control sample of cask and bottled conditioned products at the expected time of consumption. This is to establish its alcoholic strength. The method and frequency of checking is up to you, but you must be able to satisfy HMRC of the accuracy of your results.

9.7 How we will check accuracy

For UK-produced products, HMRC officers will examine your testing results and records of actions taken to keep declared strength in line with actual strength. If the results have consistently fallen above your target, we’ll want to confirm that action was taken as soon as the problem was identified to bring the process back into control or to change the declared ABV.

For imported products, HMRC officers will look at your commercial due diligence. If the ABV is consistently above the declared ABV by an amount greater than the permitted tolerances, we’ll want to see an action plan to bring the production or labelling processes into alignment.

For either imported or UK produced products, if you’ve failed to take appropriate action, an assessment may be raised for the additional duty due.

9.8 Dispute over the strength

HMRC officers can take samples of product which will be analysed using the method described. The analysis result will establish the actual dutiable strength of the product.

The following is taken from Schedule 2 of the Alcoholic Products (Excise Duty) Regulations 2023:

  • take a representative sample and, after clearing it of sediment and gas in an approved manner, a definite quantity by measure at the temperature of 20°C is made alkaline by the addition of calcium hydroxide, and then distilled.
  • make up the distillate at the temperature of 20°C with distilled water to the original measure of the quantity before distillation.
  • ascertain the strength of the distillate by determining its density in air at the temperature of 20°C by means of a pycnometer.
  • the strength of product is the percentage of alcohol by volume in the ‘Laboratory Alcohol Table’ which corresponds to the density determined by this method — where the density falls between 2 consecutive numbers in the table the strength will be determined by linear interpolation

Where a result achieved by this method is rendered inaccurate by the presence of substances other than alcohol, that method will be adjusted for the purpose of producing an accurate result.

10. Duty reliefs — general information

10.1 Small producer alcoholic products

You should read this information alongside the other guidance on Alcohol Duty to check:

  • if you’re eligible for Small Producer Relief

  • how to work out your reduced rate

Alcohol Production Account

This section has force of law under regulation 6 of the Revenue Trader (Accounts and records) Regulations 1992.

You need to keep a Production Account showing the following information:

Estimate of current year’s production.

You must keep a record of your estimate of the current year’s production together with details of how you arrived at the estimate.

Previous production year’s actual production (to be recorded each month).

The calendar month and year in question.

The total quantity (in hectolitres of pure alcohol to 2 decimal places) of alcohol that you’ve produced in that calendar month split if appropriate between your own wine and wine you’ve produced under licence.

The quantity should be reduced to take account of any wine you subsequently determine to be spoilt or wine destroyed before the duty point.

At the end of each calendar year, your annual production totals shown in the Production Account will determine your continued eligibility for the scheme and the reduced rate for the following year. Production must be under 4,500 hectolitres of pure alcohol to continue to qualify for the scheme.

In addition to the Production Account, all wine-makers are required to keep an Alcohol Duty account.

Connected premises

Any question as to whether a person is connected with another is determined in accordance with section 1122 of the Corporation Tax Act 2010. The definition of ‘connection’ is very wide but some examples of the circumstances in which people are ‘connected’ are set out below:

Examples:

Individuals are connected by marriage, family relationships and the like.

A partner is connected with his or her business partners and their spouses.

Companies under the same control are connected with each other, and the persons controlling them. A person has control of a company if that person exercises, is able to exercise or is entitled to acquire direct or indirect control over the companies’ affairs.

A company is connected with any shareholder (whether an individual or a company) which has control of the company, whether on its own or together with persons who are connected with the shareholder.

Companies are connected as a result of their being controlled by connected persons, for example, husband controlling company A and wife controlling company B.

Commissioners discretion

In exceptional circumstances, HMRC may treat 2 connected persons as if they are not connected for the purposes of Small Producer Relief. For instance, 2 family members are estranged and have no relationship with each other.

How to make a reasonable estimate of the current small producer year’s production

You must take all of the relevant factors into account including any contracts you already have to supply small producer alcoholic products and any expansion plans.

Be as accurate as possible. If you make an untrue estimate by stating the production premises will produce 4,000 hectolitres of pure alcohol in the current small producer year when you know that a reasonable estimate would be 5,000 hectolitres of pure alcohol, we can recover all of the duty underpaid.

When to notify HMRC of your estimate

You only have to tell us how much alcohol you reasonably estimate that you’ll produce when you apply for registration with us in respect of that production premises. You do not need to notify us of subsequent estimates, but you must record in your business records of each small producer year’s estimate at the time you make it, together with details of how you arrived at the estimate. This information must be kept in the form of an Alcohol Production Account.

What’s included in the previous small producer year’s production figure

This is the total quantity of product produced by a production premises or group of connected production premises in the previous small producer year and includes all alcoholic products you’ve produced, whether for yourself or for another producer or third party. It is not the quantity of product removed from the production premises. It is the quantity of product produced and put into tanks, casks, kegs, bottles, or any other receptacles of a kind in which product is distributed or sent in bulk to be packaged elsewhere.

It includes any product:

  • in stock at the end of the year

  • consumed on the premises

  • used for sampling or research

Details of your production must be kept in the form of an Alcohol Production Account.

If more than one person produced alcoholic product in the same premises during a calendar year

(a) Where more than one person produced small producer alcoholic products in the premises in that small producer year and there was no break in production (because the cancellation and new registration dates are together), the production figure for the purposes of small producer relief will be the combined total of each person’s production in that small producer year.

For example, company A produced 2,500 hectolitres of pure alcohol in the premises from 1 February to 30 September and then sold the premises to company B which produced 1,000 hectolitres of pure alcohol in the premises from 1 October to 31 January, the total production on the premises (the figure for the purposes of the small producer relief) is 3500 hectolitres of pure alcohol — the sum of company A and company B’s production figures.

(b) If there was any time during that year when the premises was not used to produce alcoholic products, for example, company A ceased production in July but only sold the business to company B in September, the 2 companies’ production figures must be grossed-up — using the formula:

A ÷ D × 365

Where A is the amount of alcohol produced in the previous year.

And D is the number of days in that part of the previous year.

For example, company A produced 2,750 hectolitres of pure alcohol during the period 1 February to 30 July and company B produced 1,175 hectolitres of pure alcohol between 1 September and 31 January. The grossed-up small producer year production figure for the premises will be 4,289 hectolitres of pure alcohol, being 3,925 (2,750 + 1,175) divided by 334 (the number of days on which the premises was used to produce alcohol) multiplied by 365.

In either case, company B will need to know details of company A’s previous production. In the case of a transfer of a going concern, the business records, including the Alcohol Production Account should be transferred to the new owner.

If you share production premises

Where persons share the use of the production premises to produce alcohol in a small producer year, the production figure for the purposes of the small producer relief will be the total production within the premises in that year.

For example, company A produced 3,350 hectolitres of pure alcohol in the premises from 1 February to 31 January and company B produced 675 hectolitres of pure alcohol in the same premises from 1 February to 31 January, the production figure for the purposes of small producer relief is 4,025 hectolitres of pure alcohol — the sum of company A and company B’s production figures. Therefore, each person will be applying the same rate to any small producer alcoholic product that they produce.

On application for registration, each producer must notify us if there is another production premises already registered at the premises. The plan, which accompanies the application, must show the position of the vessels, plant and any separate area held for each producers product.

Each producers alcoholic products must be clearly identifiable in the registered premises and in any records, including the duty status of all the alcoholic products at any time.

How production rules apply to premises that are part of a group of connected premises

If the group comprises, for example, 6 premises, 4 of which have been in production for the whole of the previous small producer year, one of which began to produce alcoholic products part-way through that small producer year and one is to start producing alcohol during the current small producer year, you simply determine each premises actual or deemed production figure (as explained in the paragraphs above). You’ll need to add all of those figures together to arrive at the group’s production figure for the purpose of making sure you are eligible for small producer relief.

If you export duty suspended small producer products

You’ll need to establish in advance of delivery or exportation that the consignee is authorised to receive the small producer product.

If the country you are exporting to operates a small producer scheme, the consignee may ask you to provide a certificate, endorsed by HMRC, that the product you’re exporting is small producer alcoholic product produced in the UK. This is so they can establish in advance of the importation to their country that the premises in the UK and the product is eligible under their rules. It is your responsibility to be aware of the rules and production volume limits of the small producer scheme in the country you are exporting to, so that their requirements are met.

You also need to be aware that different production limits apply to Northern Ireland. Check if you’re eligible for Small Producer Relief on Alcohol Duty for the production thresholds by product type for Northern Ireland.

If a certificate is required, you’ll need to make a self-declaration of your production volumes which HMRC will certify.

  1. Copy the certificate template shown at the end of this section and paste or save as a word document.

  2. Complete the first part of the document, then print and sign it.

  3. Scan the document and attach to an email.

  4. Send the email to nru.alcohol@hmrc.gov.uk.

  5. The Excise Processing Teams will validate by completing the ‘Certification — For Official Use’ part of the document and return it to you.

The process is temporary until a new print and post iform is available on GOV.UK.

You’ll need to use EMCS when moving alcohol in duty-suspension to the place of export and in Northern Ireland when moving alcohol in duty-suspension to EU member states. The following statement that alcohol is ‘small producer alcoholic product’ will be required on the eAD:

‘It is hereby certified that the product described has been produced by an independent small undertaking with a production in the previous year of [insert] hectolitres of pure alcohol’.

The above statement will let the person who removes the alcoholic product from duty-suspension to establish that the alcoholic is small producer alcoholic product and calculate the reduced duty rate payable.

A movement guarantee is required for exports.

For more information on deliveries and exports through EMCS, read Receive goods into and remove goods from an excise warehouse (Excise Notice 197).

10.2 What duty reliefs you’re entitled to

Natural losses, wastage and other legitimate causes for lost product are not liable to duty if we’re satisfied that they are genuine losses caused by the production process.

You may be eligible for duty relief on:

  • accidental losses on licensed production premises — read paragraph 11.2

  • spoilt wine or wine otherwise unfit for use — read paragraphs 11.7and section 13

  • wine not exceeding 1.2% ABV — read paragraph 5.6

  • trade samples — read section 14

  • wine for your own domestic consumption — read section 15

  • customs duty paid on spirits, beer or wine imported from outside the EU and used in the Northern Ireland for the production of wine or other fermented products for export to non-EU countries — read more information on customs special procedures that may allow you relief to get on customs duty

11. Irregularities, losses and deficiencies in licensed production premises

11.1 What are your responsibilities as a licensed wine producer

As a licensed wine producer, you’re responsible for the control of wine in your licensed premises. You must have the necessary systems to control and safeguard your stocks. You must examine critically all losses and deficiencies.

11.2 If you accidentally lose duty suspended wine

You do not have to pay duty if we’re satisfied that the wine has been lost in licensed premises and has not been consumed.

11.3 Which records of losses you must keep

You need to keep records of production and processing and these should show how much wine you lose during routine operations. For example, the losses you incur during packaging operations.

The next 4 bullets have force of law under regulation 6 of the Revenue Trader (Accounts and Records) Regulations 1992.

For accidental losses you must record:

  • the date and time the loss occurred

  • the description (product name) and the volume of wine lost, and the alcoholic strength if the loss occurred after production had been completed

  • vessels in which it was contained

  • the reason why the accidental loss occurred

11.4 Unexplained losses

If wine cannot be accounted for after the start of production, and there is no acceptable explanation, you’re liable for duty on the missing wine. It is in your own interest to keep proper records of all losses.

11.5 Offsetting stock losses against surpluses

You can offset stock losses against surpluses if you have documentary evidence showing they are related. Your records must contain a clear audit trail to justify any adjustments to stock records after finding errors. You must justify each offset. We do not allow you to accumulate losses and surpluses from various sources and then offset gross totals.

11.6 Losses of duty paid wine

Normally there is no duty relief in for wine which is lost after it has passed the duty point.

11.7 If duty suspended wine is spoilt

You’ll not have to pay the duty if we’re satisfied the wine has been unintentionally spoilt, contaminated or otherwise rendered unfit for consumption in the licensed production premises and has not been consumed. You can ‘write off’ the quantities after you’ve recorded the information in your records and destroyed any spoilt product.

We may examine your records as part of our audit process. If we’re not satisfied with your explanation and supporting evidence, you’ll have to pay the duty on the quantity previously ‘written off’.

Other legislation may apply when you destroy spoilt wine — for example, pollution.

11.8 Records of spoilt wine you must keep

The next 5 bullets have force of law under regulation 6 of the Revenue Trader (Accounts and Records) Regulations 1992.

You must record:

  • the date and time of spoiling

  • the method of destruction employed

  • the description (product name) and the volume of wine spoilt and the alcoholic strength if the wine was spoilt after production has been completed

  • the vessels in which it is or was contained

  • the reason why the wine was spoilt

11.9 Destroying duty suspended wine without paying duty

If duty suspended wine is damaged or in a non-marketable condition, you can destroy it without paying the duty as long as you follow the procedures in paragraphs 11.10 to 11.12.

11.10 What notice of destruction must you give

You must give us at least 5 working days notice if you want to destroy duty suspended wine outside your licensed premises. You must give details of the proposed method of destruction and satisfy us that your proposed process will destroy the intrinsic nature of the wine.

Working days excludes Saturdays, Sundays and public holidays.

11.11 What information you must give

You must contact the excise enquiries helpline in writing and give the following details:

  • why you wish to destroy the goods

  • details of the goods

  • the amount of duty involved

  • where and when the proposed destruction will take place

  • the method of destruction

11.12 Conditions for destroying duty suspended wine away from licensed premises

If the wine is removed from licensed premises to be destroyed at a specialist destruction site:

The next 3 bullets have force of law under regulation 12(e) of the Wine and Made-wine Regulations 1989:

  • there must be a complete audit trail which confirms the wine has been destroyed

  • the destruction of the wine must be supervised by either:
    • an Authorised Company Representative (ACR) of the wine producer, or
    • a person within the specialist destruction company who has been appointed by the wine producer to supervise the destruction on their behalf — this person must be at management or supervisory level
  • a Certificate must be obtained from the company as evidence of destruction

12. Products for reprocessing

12.1 Re-fermenting wine or residues in licensed premises

You may re-ferment any wine or residues which are:

  • taken from duty-unpaid stocks on your licensed premises

  • added to a fermenting vessel in the course of preparing for fermentation and before wine is drawn off

Enter the quantity of wine in your production records. Make sure your records are accurately and promptly updated so we can verify the quantities.

12.2 Reprocess duty paid wine which has been returned to licensed premises

You may be eligible to claim a refund of the excise duty paid on wine which has been returned to your licensed premises for reprocessing — read section 13.

13. Relief of duty on spoilt wine which has become unfit for use

13.1 Duty on wine lost or spoilt on your licensed premises

You’ll not have to pay duty on wine which is accidentally lost or spoilt on your licensed premises — read section 11.

13.2 When wine becomes spoilt or otherwise unfit for use after leaving licensed premises or being constructively removed

Wine which you’ve removed from your licensed premises on payment of duty may later become unfit for use. You can claim a refund of the Excise Duty paid on any wine returned to your premises provided it:

  • was produced by you

  • has become spoilt or otherwise unfit for use

  • has not undergone any further process or dilution since leaving your premises

13.3 Spoilt wine exceptions

The following are excluded:

  • adulterated wine (containing additions which we have not approved)

  • wine for which no satisfactory audit trail is available

If any wine becomes spoilt more than 3 years after the duty was paid, you cannot claim relief.

13.4 Destroying spoilt wine

You do not have to destroy spoilt wine to claim duty relief — it can be reprocessed instead.

13.5 Reprocessing

Reprocessing includes the following operations:

  • the mixing of one wine with another (or others) on licensed premises

  • the filtering or repasteurising of wine

13.6 How to claim relief

You must keep a spoilt wine record containing the particulars in paragraph 13.13.

13.7 When you can destroy spoilt wine

Subject to any notice of destruction being required (read paragraphs 13.9and 13.10), you may destroy spoilt wine at any time. However, entitlement to reclaim duty on spoilt wine will depend on these conditions:

The next 3 bullets have force of law under regulation 25(2) of the Wine and Made-wine Regulations 1989:

  • a full audit trail is maintained

  • requirements of other regulatory authorities are observed (for example, environmental)

  • proper control practices are maintained, including appropriate action at management and supervisory levels

13.8 More conditions for reclaiming duty on wine destroyed away from licensed premises

The following 3 sections and bullets have force of law under regulation 25(2) of the Wine and Made-wine Regulations 1989:

(a) Destructions in pub cellar:

  • there must be a complete audit trail which confirms the wine has been destroyed and that it was duty paid

  • the destruction of the wine must be supervised by a responsible representative of the wine producer, for example, an Authorised Company Representative — ACR, the ACR must be appointed by the wine producer as an ACR in their records and be trained in that wine producer’s requirements — this condition also applies to an ACR who supervises destructions for more than one wine producer

Note: the requirements of other regulatory authorities must be observed

(b) Destructions at specialist destruction sites:

  • there must be a complete audit trail which confirms the wine has been destroyed and that it was duty paid

  • the destruction of the wine must be supervised by either:
    • an ACR of the wine producer, or
    • a person within the specialist destruction company who has been appointed by the wine producer to supervise the destruction on their behalf, this person must be at management or supervisory level
  • a certificate must be obtained from the company as evidence of destruction

(c) Spoilt wine relief will depend upon there being evidence of a full credit of the duty paid value, or replacement of the goods to your customer (or owner of the goods at the time they became spoilt).

13.9 Notice of destruction

HMRC will advise you if you need to give notice (read paragraph 13.10), otherwise you can destroy the wine when you want.

13.10 How much notice of destruction you must give

If notice is required, you must give us at least:

  • 2 working days notice if you want to destroy wine in your licensed premises

  • 5 working days notice if you want to destroy wine outside your licensed premises

You must give details of the proposed method of destruction.

Working days excludes Saturdays, Sundays and public holidays.

13.11 How to destroy spoilt wine

You must destroy wine in a way acceptable to us and which makes it unsaleable as a beverage.

13.12 How to make a claim

At the end of the accounting period, total the entries in your spoilt wine record of all wine destroyed or reprocessed and transfer the total to your wine duty account. When you submit your next monthly return, deduct the duty you’re reclaiming by entering it against lines 23 to 32 on the reverse of the EX606 as appropriate and carry the total to line 36.

When auditing claims, we examine your business records and supporting evidence. If we are not satisfied with your explanation and evidence, you’ll have to repay the duty you claimed.

13.13 Particulars of the spoilt wine record

The next two sentences and 19 bullets have force of law under regulation 26(1)(d) of the Wine and Made-wine Regulations 1989.

When wine is either returned to the licensed premises for destruction or destroyed remotely, you must enter the following particulars in the destruction section of your spoilt wine record:

  • the total volume of spoilt wine destroyed

  • the strength of the spoilt wine destroyed

  • the date and time of the destruction

  • the place and method of destruction

  • the volume and strength of the wine in each container from which the spoilt wine was directly destroyed

  • evidence of the amount of duty charged or paid

  • the amount of spoilt wine relief claimed

  • the description of the wine returned by each purchaser in respect of which a claim is made

  • the name and address of each purchaser

  • the numbers and sizes of each container in which the wine was returned by each purchaser returning the wine

When wine is returned for reprocessing, enter the following particulars in a reprocessing section of your spoilt wine record:

  • the total volume of wine reprocessed

  • the strength of the wine reprocessed

  • the date and time the wine was returned for reprocessing

  • the volume and strength of the wine in each container in which it was returned for processing

  • evidence of the amount of duty charged or paid

  • the amount of relief claimed

  • the description of the wine returned by each purchaser in respect of which a claim is made

  • the name and address of each purchaser

  • the numbers and sizes of each container in which the wine was returned by each purchaser returning the wine

Unless we allow a longer period, your spoilt wine record must be completed within one hour of reprocessing taking place.

At the end of the accounting period, total the entries in the spoilt wine record of all destroyed and reprocessed wine and transfer the total to your wine duty account for claiming relief on your wine duty return.

14. Samples

14.1 Taking duty free samples

14.1.1 Production and reference samples in licensed premises

You may take these for analysis and organoleptic appreciation (but not consumption) within your licensed premises as long as you enter the quantities and reasons for removal in your samples records.

The samples should be used up in tests, destroyed or returned to process when you’ve finished with them.

14.1.2 Genuine ‘trade samples’ removed from licensed premises

You may take these as long as you enter the quantities and reasons for removal from your licensed premises in your samples records. Trade samples must:

  • not be intended for consumption

  • be restricted to quantities not exceeding one litre per product

  • be clearly labelled ‘not for sale’

  • be supplied only to a wholesaler or distributor or to a potential trade customer within the UK

There must be a genuine trade purpose for supplying the samples, for example, for analysis and tests to be carried out on the wine before purchase.

Wine used for promotions and for tasting at, for example, UK trade fairs, shows, exhibitions and supermarkets must be duty paid.

If samples are not supplied free of charge then you must pay duty on them.

14.2 What duty paid samples to take

You may take duty paid samples for any business purpose. There is no restriction on size or number. You should pay duty in the normal manner and record details in your business records.

15. Duty on domestic consumption

15.1 Wine that you or your employees drink

If you’re a grower or beekeeper who produces, or has produced for you, wine from your own fruit or honey, you can deliver from your premises duty free approved quantities of wine for your own domestic consumption, or for drinking free of charge by your employees.

The term ‘grower’ refers to a person who owns or leases vines for which they are responsible for the cultivation, nurturing and harvesting. This does not need to be done personally as the grower may contract others to carry out the work for them, but they are responsible for the supervision of any contracted work.

The term ‘domestic consumption’ means consumption or use by the:

  • grower and the growers family or, in the case of a limited or public company, its directors

  • grower’s employees and guests

15.2 Entitlement to relief

Entitlement is based on the quantity of wine produced in the preceding calendar year (January to December) and must not exceed the actual amount produced.

If no wine is produced in the preceding calendar year there is no entitlement to domestic consumption. No part of your entitlement can be carried forward from one year to the next.

15.3 Calculating domestic relief

The maximum quantity which can be delivered for domestic drinking free of duty in any calendar year from January to December is:

(a) 5.5 hectolitres, plus

(b) 10% of the quantity above 5.5 hectolitres produced in the preceding calendar year.

The total of (a) plus (b) must not be more than 11 hectolitres. Should the wine produced in the preceding year be less than 5.5 hectolitres, the maximum entitlement for relief will be limited to that actually produced.

If you want to claim this relief, you must record your domestic consumption calculation in your business records before you remove your entitlement. You’ll be liable to pay duty on any quantity over claimed.

Section 16 explains more about vine leasing.

15.4 Duty on wine for visitors

Visitors can be considered as guests. You do not pay duty as long as:

  • no charge is made for admission to the premises

  • no charge is made for the wine

  • the wine is supplied by the glass and not in bottles or other take-away packaging

Drink consumed may be taken from your domestic consumption allowance.

16. Vine leasing for domestic consumption

16.1 How vine leasing works

Vine leasing is when the owner of a vineyard leases a number of vines (or rows of vines) to an individual or group of individuals in order that they (the lessees) may receive the wine produced from the grapes of their leased vines.

16.2 Lessees receiving duty free wine

Lessees can receive wine duty free if it is for their own domestic use and there are no commercial considerations such as sale promotion agreements and so on.

You may be asked by our officer to produce contracts or agreements for inspection.

16.3 Rules for a lessee deemed to be a grower

The lessee may only receive wine produced from their own grapes.

They must take responsibility for all the work on their vines such as the cultivation, nurturing, harvesting and present the grapes from only their own vines for vinification by a winemaker.

This does not need to be done personally. The lessee or grower may contract others to carry out the work for them, but they are responsible for the supervision of any contracted work.

16.4 Rules for the vineyard owner to allow lessees to receive wine duty free

Under this scheme, the vineyard owner must:

  • not attend to the cultivation, nurturing or harvesting of the leased vines unless they or their employees are separately contracted to do so by the lessee

  • not supplement the harvest of any leased vines from any other source

  • allow the lessee to take his grapes elsewhere for making into wine (vinification)

  • maintain records of each lessee and the quantity of grapes presented for vinification with relative dates and times

Although the vineyard owner may make into wine the grapes from more than one lessee at the same time, each lessee must receive only that proportion of wine which relates to their grapes.

16.5 What will happen if any of these rules are not observed

If any of these rules are not observed, the wine produced will be liable to Excise Duty.

17. Removals from wine premises

17.1 Removals you must pay duty on

To summarise information from previous sections of this notice, duty must generally be paid on all removals from your licensed premises for the following purposes:

  • for UK consumption (usually known as a removal to home-use)

  • when wine is constructively removed — read paragraph 5.12

Duty must also be paid if:

  • the wine has been lost

  • other irregularities are discovered

  • you’re no longer licensed

  • the premises in which you’re holding wine cease to be licensed premises

17.2 Removals you’ll not pay duty on

Provided you comply with conditions HMRC may impose, you can remove wine from your licensed premises without paying duty for:

  • exportation, removal to the Isle of Man or shipment as stores — read sections 18, 19 and 20

  • supply to diplomats and visiting forces within the UK

  • for Northern Ireland only — to entitled organisations in EU member states — read section 21

  • removal to another wine premises — read section 22

  • deposit in an excise warehouse — read section 23

  • removal to the premises of a vinegar maker for use in making vinegar

  • use as trade samples — read section 14

You may also remove wine without paying duty if it is for your own consumption, as long as it is produced from ingredients you’ve grown — read section 15.

You must record all removals in your business records.

Any shortage in removal or transit will be charged with duty if you cannot give us a satisfactory explanation.

17.3 Financial guarantees

You’ll need financial security to guarantee the duty on the wine for movements from Northern Ireland to an EU country.

The guarantee must be:

In certain circumstances, guarantees may be needed for the holding and movement of wine within the UK.

For more information on financial guarantees, read section 4.

17.4 Documents you need

All intra-UK movements of wine will be submitted through the Excise Movement and Control System (EMCS) unless they qualify for the simplified procedures, read paragraph 22.2.

An electronic administrative document (eAD) will have to be raised on EMCS before the movement can start. EMCS automatically allocates an Administrative Reference Code (ARC) that uniquely identifies the movement. The ARC will be on the printed copy of the eAD or should be noted on the commercial document and must travel with the goods.

For more information on EMCS procedures, Receive goods into and remove goods from an excise warehouse (Excise Notice 197).

In the case of movements between Northern Ireland and EU countries these will also need to be submitted through the EMCS.

If movements of wine are under simplified procedures and are as described in first bullet point of paragraph 22.2, your normal commercial despatch documents will be suitable if they have:

  • the name and address of your premises

  • a unique reference number

  • the name and address of the premises you’re sending the wine to

  • the date of despatch

  • a description of the wine, including the quantity

  • a statement indicating that the wine is being moved in duty suspension

If you’ve been paid, or expect to be paid, in cash for the supply of wine in duty suspension (or any service you provide for wine in duty suspension), read section 27.

18. Removals of wine from licensed premises in Northern Ireland to EU member states

18.1 Exports of wine

This guidance only applies to licensed persons and premises in Northern Ireland.

18.2 Northern Ireland — removing wine to EU countries

All intra-EU movements of wine between Northern Ireland and an EU country will need to be submitted through EMCS.

Find more information regarding this system in Receive goods into and remove goods from an excise warehouse (Excise Notice 197) and Excise Notice 204b.

You may remove either duty-suspended or duty-paid wine to EU member states, but the procedures and requirements are different.

18.3 Northern Ireland — procedures to follow to remove duty-suspended wine to EU countries

You must follow the detailed procedures set out in Receive goods into and remove goods from an excise warehouse (Excise Notice 197) which include the following requirements:

  • you must have financial security (guarantee) in place, the minimum level of security for movements is £20,000

  • you must make sure that you’re sending the wine to a warehouse or a registered consignee which the fiscal authorities in that member state have approved to receive that type of wine

  • you must access EMCS and raise an eAD before the movement starts and obtain an ARC that’ll uniquely identify the movement

  • you must receive a valid report of receipt confirming that the consignee received the wine

18.4 Northern Ireland — sending duty-suspended wine to a non-registered trader or private individual in an EU country

If you’re sending the wine direct to a non-registered trader then you must make sure that the duty is paid prior to the wine leaving your licensed premises. You may be able to reclaim the duty as drawback — read paragraph 18.4.

If the non-registered trader appoints an agent who is authorised to receive duty-suspended excise goods, then UK duty does not need to be paid. However, the movement must be submitted through EMCS, with the agent shown as the consignee on the eAD.

If you’re sending the wine to a private individual (rather than a trader), this is known as distance selling. You must make sure that the duty is paid prior to the wine leaving your licensed premises. You may be able to reclaim the duty as drawback — read paragraph 18.4. Additionally you, as the seller, are responsible for ensuring that the duty is paid in the member state of destination. Further information on distance selling can be found in Receive goods into and remove goods from an excise warehouse (Excise Notice 197) receipt into and removal from an excise warehouse of excise goods.

18.5 Northern Ireland — may I despatch duty-paid wine to EU countries

Yes, the duty in the EU country of destination must be secured before the despatch of the goods and then paid on receipt. How this is done depends on the rules in the receiving EU country. Unless the goods are being despatched to a private individual (see paragraph 18.3), the goods must follow the instructions set out in Excise Notice 204b.

You may be able to reclaim the UK duty on the grounds that you despatch. In order to reclaim the duty, you must observe the conditions of the drawback system which are in Notice 207 Excise duty: drawback.

Drawback is a relief which provides for the repayment of excise duty-paid goods that have not and will not be consumed in the UK.

19. Exports of wine

For Northern Ireland exports of wine means exports to non-EU countries only.

19.1 Exporting wine as a small producer

If you export duty suspended wines you will need to establish in advance of delivery or exportation that the consignee is authorised to receive the wine.

19.1.1 Small wine producers in Great Britain and Northern Ireland exporting wine to outside the EU

If the country you are exporting to operates a small producer’s scheme for wine, the consignee may ask you to provide a certificate, endorsed by HMRC, that the wine you’re exporting is produced in the UK by a small wine producer. This is so they can establish in advance of the importation to their country that the small producer in the UK and the wine is eligible under their rules. It is your responsibility to be aware of the rules and production volume limits of the small wine producer’s scheme in the country you are exporting to, so that their requirements are met.

If a certificate is required, you will need to make a self-declaration of your production volumes which HMRC will certify. The following process applies:

  • copy the certificate template shown at section 19.2 and paste or save as a Word document

  • complete the first part of the document, then print and sign it

  • scan the document and attach to an email

  • send the email to: nru.alcohol@hmrc.gov.uk

  • the Excise Processing Teams will validate by completing the ‘Certification — For Official Use’ part of the document and return it to you

The process is temporary until a new print and post iform is available on GOV.UK.

You’ll need to use EMCS when moving wine in duty-suspension and where duty has been paid to the place of export.

The following statement that wine is ‘small producer’s wine’ will be required in box 17 on the eAD:

‘It is hereby certified that the product described has been produced by an independent small wine producer.’

The annual production of alcoholic beverages of the small independent producer shall be declared in box 17n of the administrative document.

The above statement will let the person who removes the wine from duty-suspension to establish that the wine is small producer’s wine.

A movement guarantee is required for exports.

For more information on deliveries and exports through EMCS, read Receive goods into and remove goods from an excise warehouse (Excise Notice 197).

19.1.2 Small wine producers in Northern Ireland moving wines in duty suspense to the EU

If the country you are moving wines to operates a small producer reduced duty rate for wines you will need to provide information on EMCS to show that the wines meet the small producer requirements. In box 17 of the eAD the following statement that wine is ‘small producer wine’ will be required:

‘It is hereby certified that the product described has been produced by an independent small producer.’

The annual production of alcoholic beverages of the small independent producer shall be declared in box 17n of the administrative document.

A movement guarantee is required. For more information on deliveries through EMCS, read Receive goods into and remove goods from an excise warehouse (Excise Notice 197).

19.2 Small producer wine export declaration

Production capacity certification for the removal of small producer wine from the UK

I CERTIFY that the below mentioned producer (enter producer name and address as per producer certificate):

XXX XXX XXX XXX

Excise number: (enter excise number as per producer certificate)

Departmental Trader Registration Number: (enter DTRN as per producer certificate)

Meets the cumulative conditions of the following criteria:

  • the producer has an annual commercial production of (enter amount) hectolitres of wine

  • the producer is legally and economically independent of all other producers

  • the producer uses production equipment that is physically distinct from all other producers

  • the producer does not produce wine under licence

Full name: …………………………

Signature: …………………………

Date: ………………..

Certification — For Official Use

I certify that the above declaration is consistent with the production records for the year ending 31 January 20XX, of the above-mentioned producer.

HMRC Officer Full Name: …………………………

HMRC Address: …………………………………………………………………………………………………………….. ……………………………………………………………………………………………………………..

Signature of HMRC Officer: …………………………

Date: ………………..

Official HMRC Stamp

19.3 Procedures you must follow to export duty-suspended wine

You must follow the procedures set out in Receive goods into and remove goods from an excise warehouse (Excise Notice 197) when you are exporting duty-suspended wine from the UK to other countries.

All movements of wine from your premises to the place of export must be submitted through EMCS and be covered by a movement guarantee, unless a simplification is available.

Guidance on EMCS, including completion of an eAD and movement guarantees, can be found in Receive goods into and remove goods from an excise warehouse (Excise Notice 197).

19.4 What customs declaration to use

You must complete an export declaration. Information and guidance is contained in the UK Trade Tariff: volume 3.

19.5 What evidence of export you need

If the correct procedures have been followed for exports using EMCS, HMRC will send you a report of export via EMCS which discharges the movement. Where no report of export is given for any reason, HMRC will issue a report of rejected export (an IE839 message).

On receipt of an IE839 message, you may be asked to show alternative evidence of export as shown in Receive goods into and remove goods from an excise warehouse (Excise Notice 197).

You may be liable for duty if you cannot produce evidence that wine removed from your premises has been exported from the UK.

More information on reports of export, CHIEF departure messages and alternative evidence of export can be found in Receive goods into and remove goods from an excise warehouse (Excise Notice 197).

From 30 March 2024, the Customs Declaration Service will be the UK’s single customs platform, all businesses will need to declare goods through this service.

19.6 Exporting duty-paid wine to other countries

If you export duty-paid wine and certain conditions are met, you may reclaim the duty under the excise duty Drawback system. For more details, read Notice 207 Excise duty: drawback. To reclaim the duty, you must be able to produce evidence that the wine has been exported.

Drawback is a relief which provides for the repayment of excise duty-paid goods that have not and will not be consumed in the UK.

20. Removal of goods to HM Ships and as ships’ stores

20.1 Removing wine to HM Ships

HMRC allows certain HM Ships to receive wine free from excise (and Customs) Duty. These removals are treated as exports, with the point of exportation being the delivery of the wine to the ship.

Movements to HM Ships are not considered to be in duty suspension and do not move under EMCS procedures. You must complete commercial documentation for the removal of wine from your premises.

You’ll find more information and procedures to follow in Receive goods into and remove goods from an excise warehouse (Excise Notice 197).

20.2 Removing wine as ships stores

You may remove wine from your premises to be shipped as stores on board ships within the UK.

These movements are not considered to be in duty suspension but supplied under relief and do not move under EMCS procedures.

The ship’s master must first get authorisation from HMRC before loading new stores onto their vessel. This authorisation is granted on Alcohol and Tobacco Duty: stores authority for spirits and tobacco products (C945). You should ask to read a copy of this form and keep a photocopy for your records.

You must complete commercial documentation for the removal of wine from your premises. Paragraph 14.5 of Receive goods into and remove goods from an excise warehouse (Excise Notice 197) gives details of the information required on the document.

You must satisfy HMRC that the wine has been shipped as stores.

21. Supplies to diplomats and visiting forces

You must have an official authorisation for the delivery of the wine. You must complete specific documentation for the removal of wine from your premises. You’ll find more information in Notice 431: visiting forces and Receive goods into and remove goods from an excise warehouse (Excise Notice 197).

22. Removals of wine

22.1 Removing wine to other licensed premises without payment of duty

All intra-UK movements of wine will need to be submitted through EMCS unless they qualify for the simplification procedures — read paragraph 22.2.

You can only remove wine:

  • to another licensed winery for:

  • blending or mixing with other alcoholic or non-alcoholic ingredients

  • conditioning and bottling or kegging

  • rendering sparkling

  • destruction

  • apple and pear wine to a registered cider maker for:

  • making cider or perry

  • conditioning and bottling or kegging

  • rendering sparkling

You’ll be responsible for the duty on the wine until you receive a receipt. The receiving wine producer or cider maker must:

  • complete a report of receipt, if the movement is submitted through EMCS

  • sign the wine duty receipt (for example, the delivery note) if under simplified procedures

The receiving wine producer or cider maker must issue a receipt within 5 days of receiving the wine in their licensed or registered premises. If you do not receive a receipt, you should contact them. If you do not receive a receipt within 4 months, you’ll be liable for the duty due on the wine. If you subsequently receive a receipt, you may credit your duty account with the appropriate amount of duty.

When wine is delivered to home-use from the receiving winery, duty will become due. Duty must be paid by the producer who finally delivers the wine to home-use.

Finished or packaged wine must not be moved, without payment of duty, from one set of licensed premises to another, with the following exceptions:

  • bottlers/packagers may return wine to the premises from which it was received

  • wine may be delivered to a commercial grower, licensed as a wine producer, provided you’ve produced the wine on their behalf — read paragraph 3.3

22.2 What are the simplification procedures

Simplification procedures apply to certain UK movements and allow for wine to be moved under duty suspension using commercial documentation or Customs documentation instead of EMCS. These procedures are limited to:

  • wine moving between UK licensed wine producers or third party packagers or excise warehouses approved to receive and store the wine — ownership of the wine must remain with the producer during the course of the movement

  • movements for direct export only from the UK where the dispatching wine producer is authorised for Customs Supervised Exports (CSE) previously known as Local Clearance Procedures (LCP) and can provide a full customs export declaration — movement guarantee details must be shown on the declaration, more information can be found in Receive goods into and remove goods from an excise warehouse (Excise Notice 197).

If movements do not meet the above criteria, then EMCS will have to be used.

22.3 What is a finished and packaged product

This is any product which is canned, bottled or otherwise packaged and will not undergo any further process of production.

23. Removal of wine to an excise warehouse

23.1 Movements of wine

All intra-UK movements of wine will need to be submitted through EMCS unless they qualify for the simplification procedures.

You may remove wine, without payment of duty, to an excise warehouse (approved under section 92 of the Customs and Excise Management Act 1979) for the following purposes:

  • fortification

  • export, shipment as stores or removal to the Isle of Man

  • use in the manufacture of goods allowed to be produced in an excise warehouse

  • bottling

  • storage and subsequent delivery to:

  • home-use

  • another warehouse

  • rendering sparkling

After fortifying, bottling or rendering sparkling, the wine may be returned to your winery.

In the case of finished and packaged products, each package must carry a satisfactory identifying mark and number. Containers must be full, and each case must hold containers of uniform size.

23.2 What documents must accompany the wine

If the movement is under EMCS, an eAD will have to be raised on EMCS before the movement can start. EMCS automatically allocates an ARC that uniquely identifies the movement. The ARC will be on the printed copy of the eAD or should be noted on the commercial document and must travel with the goods.

If the movement is under simplified procedures and is as described in first bullet point of paragraph 22.2, your normal commercial despatch documents will be suitable if they have:

  • the description of the wine

  • its alcoholic strength

  • details of the quantity contained in each package (and if appropriate, the capacity of each container)

  • the total quantity sent

Keep a copy of the despatch document, and the warehouse keeper’s receipt, for your own records. For more details on the procedures for inter-warehouse removals, read Receive goods into and remove goods from an excise warehouse (Excise Notice 197).

24. Receipt of wine in licensed premises

All intra-UK movements of wine will need to be submitted through EMCS unless they qualify for the simplification procedures.

On receipt of wine you must:

  • inspect the delivery vehicle to make sure it is secure and any locks and seals are intact

  • examine containers for signs of damage

  • check the delivery against the document accompanying the wine

  • issue a receipt within 5 days of the wine being received — if movement under EMCS, this will be a report of receipt or, if under simplified procedures, a certificate of receipt (for example, copy of delivery note) signed by an authorised person

  • record issue of the receipt

  • enter the quantity received into your stock records

  • keep the accompanying document

If you find a discrepancy between the wine received and the accompanying document, you must issue a receipt only for the wine you actually receive. Show the discrepancy clearly on the certificate of receipt or include an inventory of the shortage or loss in the report of receipt.

The wine received becomes part of your stock and is subject to the same rules as the product you produce on your licensed premises.

If you’re not approved as an excise warehouse, you can only receive wine in a ready for sale state if you produced it yourself, or if you’re a commercial grower who is licensed as a wine producer, and the wine in question has been produced on your behalf (read paragraph 3.3).

25. Trade facility warehouses

25.1 What is a trade facility warehouse

A trade facility warehouse is an excise warehouse approved under the Customs and Excise Management Act 1979 section 92(1). You’ll need a trade facility warehouse approval, as well as your winery licence, if you want to receive and store duty free:

  • spirits for fortifying

  • beer, cider or imported wine for use in the production of wine or other fermented products

HMRC will restrict any approval as a trade facility warehouse to the specific trade need as detailed on your application. For more details on approval of premises and HMRC requirements, read Registration and approval of excise goods held in duty suspension (Excise Notice 196).

25.2 Physical security in a trade facility warehouse

You may have to provide a secure compartment for storage of dutiable materials. The entrance door and any approved compartments must be secured in accordance with the requirements for warehousing premises — Registration and approval of excise goods held in duty suspension (Excise Notice 196).

25.3 Guarantee as security

You may need to get a guarantee to have part of your winery approved as a trade facility warehouse — Registration and approval of excise goods held in duty suspension (Excise Notice 196).

25.4 How to deal with receipts into warehouse

The deposit of goods in a trade facility warehouse is governed by the Excise Warehousing (Etc) Regulations 1988 (Statutory Instrument 1988/809).

The procedure and requirements set out in paragraph 24.1 of this notice and in Receive goods into and remove goods from an excise warehouse (Excise Notice 197) apply to the receipt of all eligible goods deposited in a trade facility warehouse.

You must keep a record of all receipts and usage of goods deposited in your warehouse.

25.5 Conditions and restrictions to operations in trade facility warehouses

You must follow the general procedures set out in Receive goods into and remove goods from an excise warehouse (Excise Notice 197). We’ll tell you of any restrictions or conditions on your operations or the way you conduct them.

You may fortify wine in your trade facility warehouse if it has been:

  • produced in your winery

  • received from another winery without payment of duty

25.6 Notice of operations

Unless we inform you in writing, you may start operations as soon as you’ve recorded what you intend to do in your production records.

25.7 Classification and duty liability of products

25.7.1 Conditions or restrictions on the fortification of wine or other fermented products

Fortification of wine (including UK produced wine) is governed by regulations which are administered by the Department for Environment Food and Rural Affairs (Defra). It may be necessary to consult Defra before we can approve your application.

You can fortify wine or other fermented products with added alcohol, provided the final strength does not exceed 22% ABV and the resulting product would not be classified as a spirit under the Integrated Tariff of the United Kingdom (Combined Nomenclature).

If you fortify wine or other fermented products to a strength above 22%, or the resulting product would fall to be treated as a spirit under the Tariff, then the product will be dutied in line with the spirits rate.

25.7.2 How to tell if product would be classified as a spirit under the UK Tariff

A fermented beverage, to which distilled alcohol has been added, will remain classified as such if it keeps its character. If it does not, it must be classified as a spirituous beverage.

In classifying, we applied the ‘3-stage’ test, which looked at whether the:

  • fermented beverage or the added spirit accounted for more of the overall volume of the product

  • fermented beverage or the added spirit accounted for more of the alcohol content

  • external characteristics of the product (for example, its taste, presentation and labelling) were those of a fermented or spirituous beverage

If 2 or more answers are ‘fermented beverage’, it was to be classified as such. Otherwise, it was to be classified as a spirituous product.

There will be some cases which may differ. For example, a product might derive slightly more of its volume and alcoholic strength from the fermented beverage, but taste and smell overwhelmingly like a spirituous beverage and be marketed as such. The product will be classified as a spirituous product.

Conversely, if a product tastes and smells very much like a fermented beverage, and is marketed as such, it will not matter that the added spirit might slightly predominate in terms of overall volume and alcohol content.

If the beverage has already been fortified, the spirituous product used in the fortification counts towards the total contribution of spirituous product.

25.7.3 Taste tests

We may also carry out taste tests to make a decision about the proper classification of a product. Tests are carried out by a UKAS-accredited laboratory approved by HMRC and in line with approved methods designed to give the most objective results. If we perform a test, you’ll need to provide us with samples of the product.

You can get information about tests and samples from the Tariff Classification Service.

25.7.4 Exceptions to taste tests

We do not carry out tests if the finished product falls under the Combined Nomenclature headings 2204 or 2205, detailed in Volume 2, Part 2 of the UK Tariff.

24.7.5 Getting a Binding Tariff Information (BTI)

A BTI is a written decision on the proper tariff classification of a product. It is given by HMRC on application, provided it relates to an import or export in contemplation. The application must be made to the Tariff Classification Service on form C103 and you should also provide samples of the product.

A BTI is legally binding on HMRC and all customs authorities in the EU for 6 years from the date of issue (although in some circumstances it may be revoked or annulled before then). You’re under no obligation to obtain a BTI and you should find it possible to work out for yourself how your products should be classified by reading the Tariff and consulting the guidance in this notice.

The tariff classification does not always govern excise duty liability and countries in the EU may apply a different rate of Excise Duty to your product.

For help and advice, contact the Tariff Classification Service.

25.8 Records

In all cases you should keep records giving the full product specification, the step-by-step manufacturing process and any labelling and marketing material as well as a clear audit trail showing how you worked out the duty liability of the product.

This must include calculations you’ve made to decide how your product should be classified — read paragraph 24.7.

25.9 Mixing wine or other fermented products with beer

You can mix wine or other fermented products with beer, but only in a trade facility warehouse. If the alcoholic strength of these mixtures does not exceed 5.5% ABV, do not contain any spirits and the predominant ingredient is beer, they will attract the rate applicable to beer.

Mixtures exceeding 5.5% ABV that do not contain spirits are chargeable with duty as other fermented products at the rate appropriate to their strength band.

25.10 Accounting for duty

For products classified as other fermented products, duty is paid in the normal way on your EX606.

For those classified as beer or spirits, duty is accounted for on either form:

25.11 Completing a stock return

On a monthly basis, excise warehouse-keepers must submit:

  • stock returns

  • schedules and more information we need relating to the goods

The authorised warehouse-keeper (the warehouse proprietor, a partner, or if a company, a director or company secretary) must certify each return as true and complete.

More information on stock records and stock returns for excise warehouses can be found in Receive goods into and remove goods from an excise warehouse (Excise Notice 197).

26. Distillation analysis: determining the strength of wine

This method is referred to in section 9.

If there is a dispute over strength, our officer may take samples of wine which will be analysed by:

  • taking a representative sample and, after clearing it of sediment and gas in an approved manner, a definite quantity by measure at the temperature of 20°C is made alkaline by the addition of calcium hydroxide, and then distilled

  • making up the distillate at the temperature of 20°C with distilled water to the original measure of the quantity before distillation

  • ascertaining the strength of the distillate by determining its density in air at the temperature of 20°C by means of an approved pycnometer used in an approved manner

  • the strength of product is the percentage of alcohol by volume in the Laboratory Alcohol Table (a table of which a copy, as relating to the Alcoholic Products (Excise Duty) Regulations 2023 is available at laboratory alcohol table for working out alcohol content)

Where the result from this method is inaccurate because of the presence of substances other than alcohol, that method shall be adjusted, as may be approved by HMRC, to produce an accurate result.

27. Telling us about cash transactions

27.1 If you’re paid in cash for wine supply

As a licensed wine producer, you must notify us if you’ve been paid, or expect to be paid, in cash for the supply of duty suspended wine which is more than £9,000 (or equivalent in other currencies).

27.2 How to tell HMRC about supply

You must fill out form W7 Notification of cash payments. For information on completion of the W7, refer to the explanatory notes on the reverse of the form.

Send the completed form to the fax number or email address shown on the W7.

If you’re paid, or expect to be paid, in 2 or more instalments, which individually are below the £9,000 notification threshold but in total will exceed this amount, you must also notify us on form W7 when the first cash payment is received.

Provided you’ve told us about the transaction, you do not need to wait for us to respond to receipt of the W7 before removing duty suspended wine to other licensed premises, excise warehouses or EU member states.

You must also tell us of any cash payments received, exceeding £9,000, for any service you provide relating to duty suspended wine, for example, storage facilities, handling charges, packaging of wine or use of an excise movement guarantee.

28. Review and appeal procedures

28.1 If you disagree with our decision

When we make a decision that you can appeal against, we’ll tell you and offer you a review. We’ll explain the decision and tell you what you need to do if you disagree.

For example with:

  • the amount of an assessment

  • the issue of a civil penalty

  • a decision specifically connected to the relevant duty

Within 30 days you can:

  • send new information or arguments to the officer you’ve been dealing with

  • have your case reviewed by a different officer

  • have your case heard by an independent tribunal

A review will be handled by a different officer from the one who made the decision. If you prefer to have an independent tribunal hear your case, write to the Tribunals Service.

28.2 Time limit in asking for a review

If you want us to review a decision, you must write to the person who issued the decision letter, within 30 days of the date of that letter.

We’ll complete our review within 45 days, unless we agree another time with you.

You cannot ask the tribunal to hear your case until the 45 days (or the time we agreed with you) has expired, or we have told you the outcome of the review.

If you’re not satisfied with the review’s conclusion, you have 30 days to ask the tribunal to hear your case.

If we cannot complete our review within 45 days, or any time we agreed with you, we’ll ask you whether you’re willing to agree to an extension so that we can complete the review. If you do not agree to an extension, the review is treated as concluding that the decision being reviewed is upheld.

We’ll write and tell you this. You then have 30 days from the date of that letter to ask the tribunal to hear your case.

28.3 What to include in your request for review

Your request should state the full details of your case, the reasons why you disagree with us and provide supporting documentation. You should also state what result you expect from our review.

28.4 What if you do not want a review

If you do not want a review, you may appeal to the independent tribunal. You need to send your appeal to the Tribunals Service within 30 days of the date on the decision letter.

28.5 Where to get more information

You can find more information about reviews and appeals in fact sheet HMRC1.

29. Glossary

Terms Description
Accounting period A calendar month, or other period as may be authorised.
Alcoholic strength (by volume) Ratio of the volume of ethyl alcohol contained in any alcoholic product to the volume of alcoholic product, including the alcohol (expressed as a percentage to one decimal place).
Authorised warehouse keeper Occupier or operator of a tax warehouse (read definition of tax warehouse).
Cider In the Finance Act (No. 2) 2023, ‘cider’ is defined as a product which:

(a) is obtained from the fermentation of apple juice or pear juice,
(b) has been produced without the addition, at any time, of—
(i) another alcoholic product, or
(ii) anything, other than a permitted substance, which communicates colour or flavour
(c) satisfies the juice content requirements, and
(d) is of an alcoholic strength of less than 8.5%

In addition, the cider definition provides that ‘the pre-fermentation mixture satisfies the pre-fermentation requirement’ and the cider ‘satisfies the final product juice requirement’ For more details read Notice 162: Cider production.

‘cider or perry of a strength exceeding 1.2% alcohol by volume (ABV) but less than 8.5% ABV obtained from the fermentation of apple or pear juice without the addition at any time of any alcoholic product which communicates colour or flavour other than the Commissioners may allow as appearing to them to be necessary to make cider or perry’ — see paragraph 5.5 and section 25.
Customs Duty Charges on imported goods levied under the Common Customs Tariff of the European Union, any other charges having equivalent effect and agricultural levy.
Duty point The time when the duty becomes payable, whether or not payment is deferred.
Duty suspension An arrangement, which allows goods liable to Excise Duty to be produced, processed, held, received and despatched without payment of duty.
Excise Duty The duty charged on:
Alcoholic products either produced in or imported into the UK
Section 47 of the Finance (No. 2) Act 2023)
Excise warehouse A place approved by HMRC under the Customs and Excise Management Act 1979 section 92 for the storage of goods on which Excise Duty is suspended.
Fortification The mixing of wine or other fermented products with spirits under sections 57 or 58 of ALDA.
Grower The person(s) who own or lease vines and nurture, pick and generally look after the fruit.
Hectolitre 100 litres.
Large pack Containers in excess of 10 litres (casks and kegs)
Other fermented products Any alcoholic product obtained from fermentation, or by mixing any alcoholic product or substance with the product of alcoholic fermentation, which is not wine, beer, cider or spirits.
Our officer An officer of HMRC
Package To put wine into tanks, bottles or any other receptacles of a kind in which wine or other fermented products is distributed to wholesalers or retailers.
Product A description of wine according to its brand name, package size and alcoholic strength.
Rendering sparkling It has an alcoholic strength in excess of 5.5% ABV, and
as a result of any process:
— it is held in a closed bottle and has a pressure, due to carbon dioxide, at 20°C of not less than 3.0 bars above atmospheric pressure
— regardless of pressure it is held in a closed bottle which has a mushroom stopper held in place by a tie or fastening
Small pack Containers of 10 litres or less (bottles and cans).
Spirits (anything over 22%) Spirits of any description (other than denatured alcohol) including all alcoholic spirits mixed with spirits, and all mixtures, compounds or preparations made with spirits.
Still wine Any wine which has not been rendered sparkling (see above).
Strength Alcoholic strength.
Tariff Integrated Tariff of the United Kingdom.
Tax Warehouse Premises in which Excise goods may be produced, processed, held, received and despatched under duty suspension. Licensed premises and Excise warehouses are tax warehouses.
Trade facility warehouse A warehouse approved under the Customs and Excise Management Act 1979 for specific purposes as per Notice 196: Excise goods — authorisation of warehouse keepers, approval of premises and registration of owners.
Wine Any alcoholic product obtained from the alcoholic fermentation of fresh grapes or the must (juice) of fresh grapes, whether or not the alcoholic product is:
— fortified with spirits
— flavoured with aromatic extracts
The European Community Wine Regulations require wine to be made of fresh grapes, originating from within the European Community. They also specify how the wine is to be manufactured and marketed.
Widget Device inserted into cans and bottles which recreates the effect of draught wine or other fermented products when it is poured.

Your rights and obligations

Read the HMRC Charter to find out what you can expect from us and what we expect from you.

Comments or suggestions

If you have any feedback about this notice, write to:

HMRC
Alcohol Team
4th floor Trinity Bridge House
2 Dearmans Place
Salford
M3 5BS

You’ll need to include the full title of this notice. Do not include any personal or financial information like your VAT number.

If you need general help with this notice or have another question contact the excise enquiries helpline.

Putting things right

If you’re unhappy with HMRC’s service, contact the person or office you’ve been dealing with and they’ll try to put things right.

If you’re still unhappy, find out how to complain to HMRC.

How HMRC uses your information

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