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HMRC internal manual

Beer Guidance

HM Revenue & Customs
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Registration: The due diligence condition

With effect from 1st November 2014, a due diligence condition becomes a condition of registration for brewers and packagers approved under Section 41A of ALDA (approved to trade under duty suspension arrangements). It is aimed at those who are dealing in alcoholic liquor goods.

Due diligence is the appropriate reasonable care a business exercises when entering into relations/contracts with other businesses. The approach will differ from business to business, with different tests being applied by the business depending on where it is within a supply chain. It must, for example, assess the risks of alcohol duty fraud within the supply chain in which it operates and put in place reasonable and proportionate checks in its day to day trading, to identify transactions that may lead to fraud or involve goods on which duty may have been evaded.

Further information on, for example:

  • why and when businesses should be carrying out due diligence
  • why this condition was introduced
  • what brewers and packagers are expected to do
  • how they assess the risks in their supply chains
  • what checks they should carry out
  • the due diligence risk indicators; and
  • examples of due diligence checks

can be found in the Excise Due Diligence Condition guidance and at section 35 of Notice 226.