Guidance

Reliefs for Cider Duty (Excise Notice 162c)

You can claim relief for cider that you use for samples, that you've lost, and that has been spoilt, contaminated or destroyed.

Cider becomes liable for duty when it first exceeds 1.2% alcohol by volume (ABV).

You need to keep a record of all cider you make but you will not have to pay duty on cider that’s covered by a relief.

To claim reliefs, put the details of the relief claim and the deduction on your Cider Duty Return.

Lost cider

You do not have to pay duty on cider that you’ve accidentally lost.

You need to explain how you lost the cider and keep records of it. You’ll have to pay duty if you do not have an acceptable explanation of how you lost the cider.

You can offset lost stock against surplus cider you’ve made, if you have evidence showing these are related.

You must keep a record showing the adjustments to your stock records. You cannot use losses from various sources to offset the duty on the total amount of cider you’ve made.

You cannot claim relief on cider that’s lost after it has already passed the duty point.

Records you must keep

The following section has the force of law under regulation 6 of the Revenue Traders (Accounts and Records) Regulations 1992.

For accidental losses you must record the:

  • date and time the loss occurred
  • description (product name) and the volume of cider lost, and the alcoholic strength if the loss occurred after production had been completed
  • vessels in which it was contained
  • reason why the accidental loss occurred

Duty suspended cider that’s spoilt

You do not have to pay duty on cider that’s not been consumed and has been accidentally:

  • spoilt
  • contaminated
  • made unfit to drink

You do not have to include this cider in your return as long as you’ve recorded and destroyed or reprocessed the spoilt cider.

Records you must keep

The following section has the force of law under regulation 6 of the Revenue Traders (Accounts and Records) Regulations 1992.

You must record the:

  • date and time of spoiling
  • method of destruction employed
  • description (product name) and the volume of cider spoilt, and the alcoholic strength if the cider was spoilt after production has been completed
  • vessels in which it is or was contained
  • reason why the cider was spoilt

Re-fermenting and reprocessing cider

You can re-ferment any cider or residues that you:

  • have not paid duty on
  • add to a fermenting vessel in the course of preparing for fermentation and before cider is drawn off

Enter the quantity of cider in your production records.

If you destroy duty suspended cider away from your licensed premises

You need to tell HMRC at least 5 working days before if you plan to destroy cider outside your premises.

You must write to the Excise Enquiries Team and explain:

  • why you wish to destroy the cider
  • details of the cider
  • the amount of duty involved
  • where and when the planned destruction will take place
  • the method of destruction (so we can make sure it will not be reusable as cider)

The following section has the force of law under regulation 12(e) of the Cider and Perry Regulations 1989.

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

  • there must be a complete audit trail which confirms the cider has been destroyed
  • the destruction of the cider must be supervised by either:
    • an Authorised Company Representative (ACR) of the cider maker
    • a person within the specialist destruction company who has been appointed by the cider maker 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

Spoilt cider that duty has been paid on

You can claim a refund of duty for cider which was spoiled once it left your premises if it:

  • was made by you
  • did not go through additional processing or dilution once it left your premises
  • was not adulterated cider (containing additions that we have not approved)
  • was not unconsumable cider (for example, sediment in cask-conditioned cider) on which duty was not charged
  • spoilt within 3 years of Cider Duty being paid on it

You must have a satisfactory audit trail for the cider.

You will also need to have evidence that you gave your customer a full credit of the duty paid value or a replacement of the goods.

You only can claim relief for spoilt cider if you reprocess it or destroy it. You should:

  • record all spoilt cider that you’ve destroyed or reprocessed in a spoilt cider record
  • total all entries for spoilt cider that you destroyed or reprocessed
  • add that total to your Cider Duty account

You should deduct the duty you’re reclaiming from your monthly return.

Reprocessing spoilt cider that duty has been paid on

You can claim a refund on cider that you’ve paid duty on when it’s returned to your premises for reprocessing.

Reprocessing includes the:

  • mixing of one cider with another (or others) on registered premises
  • filtering or repasteurising of cider

The following section has the force of law under regulation 26(1)(d) of the Cider and Perry Regulations 1989.

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

  • the total volume of cider reprocessed
  • the strength of the cider reprocessed
  • the date and time the cider was returned for reprocessing
  • the volume and strength of the cider 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 cider 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 cider was returned by each purchaser returning the cider

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

Destroy spoilt cider that duty has been paid on

You can destroy cider if it’s been spoilt and cannot be consumed.

When you can destroy cider

The following section has the force of law under regulation 25(2) of the Cider and Perry Regulations 1989.

Entitlement to reclaim duty on spoilt cider will depend on these conditions:

  • 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

Tell HMRC before you destroy cider

HMRC will tell you if you need to give notice before you destroy the cider. Otherwise you can destroy the cider when you want.

If you need to provide notice, you need to tell HMRC at least:

  • 2 working days before if you plan to destroy cider in your licensed premises
  • 5 working days before if you plan to destroy cider outside your licensed premises

You need to tell HMRC:

  • why you wish to destroy the cider
  • details of the cider
  • the amount of duty involved
  • where and when the planned destruction will take place
  • the method of destruction (so we can make sure it will not be reusable as cider)

Destroy spoilt cider at a specialist destruction site

The following section has the force of law under regulation 25(2) of the Cider and Perry Regulations 1989.

For destructions at specialist destruction sites:

  • there must be a complete audit trail which confirms the cider has been destroyed and that it was duty paid
  • the destruction of the cider must be supervised by either:
    • an ACR of the cider maker
    • a person within the specialist destruction company who has been appointed by the cider maker 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

Spoilt cider 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).

Destroy duty paid cider in a pub cellar

The following section has the force of law under regulation 25(2) of the Cider and Perry Regulations 1989.

There must be a complete audit trail which confirms the cider has been destroyed and that it was duty paid.

The destruction of the cider must be supervised by a responsible representative of the cider maker, for example, an ACR. The ACR must be appointed by the cider maker as an ACR in their records and be trained in that cider maker’s requirements. This condition also applies to an ACR who supervises destructions for more than one cider maker.

The requirements of other regulatory authorities must be observed.

Spoilt cider 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).

Samples

You do not have to pay duty on samples of cider you take to test, or give to others to test for free.

Your samples should:

  • not be meant for consumption
  • not be more than one litre per product
  • be clearly labelled ‘not for sale’
  • only supplied to a wholesaler, distributor or a potential trade customer in the UK

You need to record the quantity of your samples and the reasons for collecting them.

You’ll need to destroy any samples that you do not use completely, or return them to the cider making process.

You need to pay duty on cider used for promotions and used to provide a tasting to customers. This includes cider used at UK trade fairs, shows, exhibitions and supermarkets.

Domestic consumption

You can get relief on cider made from your own fruit that you drink or give to your employees to drink.

You must own or lease the orchard and be responsible for cultivating, nurturing and harvesting the fruit. You may either do this directly or contract it to someone else.

Who can get cider for domestic consumption

Cider can be recorded as for domestic consumption if it’s consumed by the:

  • grower and their family
  • grower’s employees and guests
  • directors of the limited company that’s responsible for cultivating, nurturing and harvesting crops

Guests can only be included if they:

  • do not pay for admission
  • do not pay for the cider
  • are given cider by the glass, not in a bottle, box or other take-away packaging

Amount you can claim relief for

You can only claim domestic consumption relief if you made cider from January to December in the preceding year. You cannot claim relief for more cider than you made from January to December in the preceding year. You cannot carry your entitlement to claim cider for domestic consumption forward from one year to the next.

Other reliefs

If you use alcohol as an ingredient, or for medical, scientific or manufacturing purposes, you may qualify for relief from alcohol duties.

Published 11 July 2018