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HMRC internal manual

VAT Single Market

Particular types of transaction: wine


In essence the movement of wine is no different from the movement of any other excise goods (see VATSM6400) but the commercial arrangements and terminology used can be confusing.

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En primeur wine

The term ‘en primeur’ usually describes the sale of wine while the grapes are still on the vine, or wine offered for sale whilst maturing in the producer’s cellars.

In a typical example a French producer will sell their wine via a ‘negotiant’ who in turn supplies the product to a UK merchant. The negotiant will zero-rate the supply made in France against the UK merchant’s VAT number. Eventually (up to 2/3 years later) the merchant will either put the wine into a bonded warehouse or take delivery.

In the case of warehoused sales by the merchant to individuals, it is the merchant who removes the wine from warehouse and accounts for the acquisition VAT and duty. At the same time the merchant accounts for domestic VAT on the supply to the customer.

In the case of wine delivered directly to the merchant, the normal acquisition rules apply and the merchant will account for acquisition tax, and UK VAT on the onward supply to the customer in the normal way. Special time of supply rules also apply to en-primeur wine. For further details about this see the manual covering time of supply (VATTOS).

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Ex-cellar wine from France

‘Ex-cellar’ is the term applied to sales for which the customer arranges transport of the wine from the producer’s premises. This can produce difficulties where it involves a French producer supplying to a UK merchant who already has a final customer in the UK. In these circumstances it is the final customer who is responsible for transporting the wine to the UK.

This produces two supplies - namely a supply by the producer of the wine to the merchant (the first supply), and a supply by the merchant to the final customer (the second supply). In any other circumstances it would be expected that the first supply would be treated as a domestic supply in France and the second as an intra-EC supply from France - zero-rated if the final customer were VAT registered in the UK.

This would mean that the UK merchant is liable to register for VAT in France. However, it is understood that the French authorities are unwilling to register UK merchants in these circumstances. They consequently accept zero-rating of the supply by the producer against the merchant’s UK VAT number. It follows from this that the acquisition and onward supply by the UK merchant to the UK customer is to be treated as taking place in the UK and therefore subject to UK VAT.