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HMRC internal manual

Duty Free Spirits Guidance

Technical Guidance: How can a trader dispose of waste Duty Free Spirits?

Where spirits are removed for disposal after being used in a process there should be evidence that the spirits would be difficult to recover as potable. All details of the disposal should be recorded in the trader’s business records with a clear audit trail to show that all the spirits removed for disposal were, indeed, destroyed.

The following case study describes one authorised process for the disposal of waste DFS.

Case Study 1 - Customer A is a pharmaceutical manufacturer. He produces a waste effluent stream of 40 - 60% ethanol; 40 - 60% water. The waste stream is tankered to Customer B who will replace 15% of the water content with waste methanol to produce a product to a specification for Customer C. Customer C will then use the blend as a support fuel for incineration for their own toxic waste stream.

Case Study 2 - Customer A is an authorised user of DFS as he produces medicinal products. He can sell his waste effluent stream to Customer B who will need to be an authorised compounder and be authorised to receive waste DFS. Customer B can then add the methanol content and pass the final product on to Customer C. Customer C will not require authorisation to receive DFS.

There is no liability to Hydrocarbon oil duty as “waste oil”, which defines this product, can be used for destruction, rather than production, without a charge for duty.