Guidance

Reliefs for Wine Duty (Excise Notice 163c)

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

Wine or made-wine becomes liable for duty when it first exceeds 1.2% alcohol by volume (ABV).

You need to keep a record of all the wine or made-wine you produce but you’ll not have to pay duty on wine or made-wine that’s covered by a relief.

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

In this guide, ‘wine’ refers to both wine and made-wine.

Lost wine

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

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

You can offset lost stock against surplus wine 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 wine you’ve made.

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

Records you must keep

The following section has the 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
  • 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
  • reason why the accidental loss occurred

Duty suspended wine that’s spoilt

You do not have to include the duty on wine that has not been consumed and has been accidentally:

  • spoilt
  • contaminated
  • made unfit to drink

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

Records you must keep

The following section has the force of law under regulation 6 of the Revenue Trader (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 wine spoilt and the alcoholic strength if the wine was spoilt after production has been completed
  • vessels in which it is or was contained
  • reason why the wine was spoilt

Re-fermenting and reprocessing wine

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

  • have not paid duty on
  • add 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.

If you destroy duty suspended wine away from your licensed premises

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

You must give details of the proposed method of destruction and satisfy us that your proposed process will destroy the nature of the wine.

You need to write to the Excise Enquiries Team and explain:

  • why you wish to destroy the wine
  • details of the wine
  • 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 wine)

The following section has the force of law under regulation 12(e) of the Wine and Made-wine Regulations 1989.

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

  • 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
    • 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

Spoilt wine that you’ve paid duty on

You can claim a refund of duty for wine which was spoiled after it passed the duty point if it:

  • was made by you
  • did not go through additional processing or dilution once it left your premises
  • was not adulterated wine (containing additions that we have not approved)
  • spoilt within 3 years of you paying duty on it

You’ll also need to have evidence of a full credit of the duty paid value or replacement of the goods to your customer.

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

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

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

Reprocessing spoilt wine that you’ve paid duty on

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

Reprocessing includes the:

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

The following section has the force of law under regulation 26(1)(d) of the Wine and Made-wine Regulations 1989.

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

Destroy spoilt wine that you’ve paid duty on

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

When you can destroy wine

The following section has the force of law under regulation 25(2) of the Wine and Made-wine Regulations 1989.

Entitlement to reclaim duty on spoilt wine 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 the wine

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

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

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

You need to tell HMRC:

  • why you wish to destroy the wine
  • details of the wine
  • 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 wine)

Destroy duty paid wine at a specialist destruction site

The following section has the force of law under regulation 25(2) of the Wine and Made-wine Regulations 1989.

For 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
    • 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

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).

Destroy duty paid wine in a pub cellar

The following section has the force of law under regulation 25(2) of the Wine and Made-wine Regulations 1989.

There must be a complete audit trail which confirms the wine has been destroyed and that it was duty paid, and the destruction of the wine must be supervised by a responsible representative of the wine producer, for example, an 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.

Add destroyed wine to your spoilt wine record

The following section has the 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

Samples

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

Your samples should:

  • not be meant for consumption
  • not be more than 1 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 winemaking process.

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

Domestic consumption

You can get relief on wine made from your own fruit (or honey) that you drink or give to your employees to drink.

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

Who can get wine for domestic consumption

Wine can be recorded as for domestic consumption if it’s used 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 wine
  • are given wine 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 wine from January to December in the year before. You cannot claim relief for more wine than you made from January to December in the preceding year.

The maximum quantity that you can claim domestic relief for is 5.5 hectolitres plus 10% of the quantity above 5.5 hectolitres made in the preceding calendar year. You cannot claim for more than 11 hectolitres of wine in total.

Vine leasing

Vine leasing is when the owner of a vineyard leases vines to an individual or group and they get the wine made from those vines.

Lessees can only get wine duty free if it’s only for domestic use and they were responsible for:

  • cultivating, nurturing and harvesting the grapes
  • sending the grapes to a winemaker to turn into wine

They can either do this themselves or contract others to carry this work out.

Vineyard owners

The vineyard owner and their employees must:

  • not cultivate, nurture or harvest the leased vines, unless they’re separately contracted by the lessee to do so
  • not allow grapes from another source to be added to the harvest of the leased vines
  • let the lessees take their grapes to any wine maker to be made into wine

The vineyard owner will need to record:

  • each lessee who presented grapes to be made into wine
  • the quantity of grapes they presented
  • the date and time they presented the grapes

Other reliefs

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

Published 11 July 2018