Foreword: Further Information

Notice 226 Beer Duty April 2010
Foreword
This notice cancels and replaces Notice 226 August 2009. Paragraphs 7.5, 8.9, 9.23, 9.26,10.3, 10.8, 20.12, 20.13 and 20.20 of this notice which explain record keeping requirements, and spoilt beer conditions, have the force of law under the Revenue Traders (Accounts and records) Regulations 1992 and the Beer Regulations 1993. These paragraphs are indicated by being placed in a box. EXAMPLE: The following rule has the force of law You must record the date of any change of status of any beer from duty suspended to duty paid and the product(s).
Further information
The British Beer and Pub Association has a series of Guidelines offering advice to brewers and packagers on how to meet their obligations. Copies of these Guidelines may be obtained from: Brewing Publications Ltd Market Towers 1 Nine Elms Lane London SW8 5NQ Tel: 0207 627 9191 Fax: 0207 627 9123.
Other documents on this or related subjects

Notice 196: excise goods: authorisation of warehousekeepers, approval of premises and registration of owners Notice 197 Excise goods: receipt into and removal from an excise warehouse of excise goods Notice 203A Registered Consignees Notice 204A Temporary Registered Consignees Notice 208 Excise assessments Notice 209 Civil Penalties: fixed, geared and daily Notice 700 The VAT Guide Form EX 46 Beer Duty Return
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Form W7 Notification of cash payments for alcohol goods or alcohol related services in duty suspension VAT100 VAT Return
1. Introduction 1.1 What is this notice about?

This notice explains the effects of the law and regulations covering the production, storage and accounting for duty on beer. It contains various technical terms and you may find the glossary, helpful - see section 35. The effects of the law and regulations covering the handling of beer in Excise warehouses are explained in Notice 196 Excise goods: Authorisation of warehouse keepers, approval of premises and registration of owners and Notice 197 Excise goods: Receipt into and removal from an excise warehouse of excise goods.
1.2 What's changed?

There has been some changes to penalties please see paragraphs 3.9 and 15.8. There are new procedures for movements intra EU and intra UK please see the following paragraphs; 8.19, 8.22, 8.23, 8.27, 9.7, 9.11, 9.12, 9.13, 9.14, 9.16, 27.5, 27.6, 27.9, 27.16. There is a new section 34 which explains review and appeal procedures effective from 1 April 2009.
1.3 Who should read this notice?

It is primarily intended for: (a) (b) (c) commercial brewers packagers of beer, and importers and exporters of beer.
1.4 Where can I find the relevant law?

You will find the main legal provisions relating to the production, holding and movement of beer in: The Alcoholic Liquor Duties Act 1979, and
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The Beer Regulations 1993 (SI 1993/1228).
Other legislation may also apply to brewers and packagers. This includes: The Customs and Excise Management Act 1979 The Revenue Traders (Accounts and Records) Regulations 1992 (SI 1992/3150), which cover the keeping of records The Alcoholic Liquor Duties (Beer-based Beverages) Order 1994 (SI 1994/2904) The Excise Goods (Holding, Movement and Duty Point) Regulations 2010 The Excise Goods (Drawback) Regulations 1995 (SI 1995/1046) The Excise Duty Points (Duty Suspended Movement of Excise Goods) Regulations 2001 (SI 2001/3022), and The Beer from Small Breweries (Extension of Reduced Rates of Excise Duty) Order 2004 (SI 2004/1296).
You can access details or get copies of the Acts or Regulations from the Office of Public Sector Information.
1.5 Do any parts of this notice have legal force?

Sometimes the law says that detailed rules on a particular matter may be set out in a notice published by HM Revenue & Customs. Paragraphs 7.5, 8.9, 9.23, 9.26, 10.3, 10.8, 20.12, 20.13, and 20.20 have legal force and are indicated by being placed in a box.
2. The basics 2.1 What is beer?

In the Alcoholic Liquor Duties Act 1979, beer is defined as including: ale, porter, stout and any other description of beer, and any liquor which is made or sold as a description of beer or as a substitute for beer, whose alcoholic strength exceeds 0.5% ABV.* This includes mixtures of beer with non-alcoholic drinks, (for example, with lemonade to produce shandy). Also classified as beer for duty purposes are certain mixtures of beer with alcoholic liquors or substances where the final product strength does not exceed 5.5% ABV - see section 19.
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The description does not include black beer made from worts at a gravity of 1200 degrees or more before fermentation. *No duty is chargeable in the UK on beer that does not exceed 1.2% ABV.
2.2 How does the duty system work?

Brewers and their production premises must be registered with us for beer duty purposes see sections 3 and 4. Beer: becomes liable to duty when it is produced or imported see section 7, and can be held on or moved between registered premises or to Excise warehouses without payment of duty. This is known as duty suspension see section 9.
Packagers of beer may apply for registration to receive beer without payment of duty, for packaging see sections 3 and 5. Duty: is charged on the quantity and alcoholic strength (alcohol by volume) of the beer see section 7 is normally calculated by reference to the quantity and alcoholic strength stated on the package label or invoice see sections 11 and 12 becomes payable when beer is released from or consumed in registered premises or Excise warehouses see section 7, and may also be paid on the constructive removal of beer held in duty suspense on registered premises see paragraph 7.5.
2.3 How do I calculate and pay the duty?

You must: keep records of all beer produced keep records of all beer leaving registered premises, or otherwise passing the duty point see paragraphs 7.3 and 7.5 calculate duty due on all beer released for home use see paragraph 7.6 keep a beer duty account see section 13
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complete a beer duty return and send it to the Beer Duty Accounting Centre see section 15, and pay the duty by direct debit unless HM Revenue & Customs has specifically agreed otherwise for details on duty payment, see section 16.
If your beer is small brewery beer, you must: keep records of all beer produced in a Beer Production Account see paragraph 8.9 and section 14, and keep records of all small brewery beer you handle in duty suspension.
2.4 Visits by HM Revenue & Customs

We will make visits to ensure duty is being correctly assessed and accounted for on all beer leaving registered premises. Assurance is based on auditing your commercial, accounting and management control systems and on physical checks. We will carry out physical checks on production, stock and movements of beer in duty suspension. For further details about our visits see Notice 989 Visits by Customs and Excise officers.
2.5 Will you make an appointment?

When we intend to carry out our checks we will normally make a prior appointment. Occasionally, we may make visits without appointment but the attending officer will give the reason for the unannounced visit. At any reasonable time you must permit our officers access to any area of the registered premises. You must ensure that all your security personnel are aware that we may visit without appointment. All of our officers carry identification and will show this when they arrive.
2.6 What happens if I fail to meet my legal obligations?

If you fail to comply with the law and regulations relating to this notice (see paragraph 1.4) or do not account for the correct amount of excise duty, we may take action including the issue of assessments and/or civil penalties. These are explained in Notice 208 Excise assessments and Notice 209 Civil Penalties: Fixed, geared and daily. From the 1 April 2010, you may also be liable to penalties if you fail to apply to register with HMRC at the right time or if your monthly duty return is inaccurate see paragraphs 3.9 and 15.8. In many cases you will have the right to appeal. Full details of the appeals procedure are set out in section 34 of this notice.
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3. Registration: general 3.1 General information

You must apply to be registered as a brewer before you start brewing unless you are covered by one of the exemptions listed in paragraph 4.4. The proprietor, partnership or company intending to brew beer must apply for registration. A separate registration is required for each premise in which beer is produced. If you are not a brewer but you package bulk beer, you may apply to be registered if you wish to receive the beer in duty suspension for packaging.
3.2 What does registration cover?

Registration covers: the production of beer the holding of beer in duty suspension, and the classes of beer which may be held.
Only producers and packagers of beer may be registered under the Beer Regulations 1993. If you are not a producer or packager of beer, you may hold beer in duty suspension in an authorized Excise warehouse. This is explained in Notice 197 Excise goods: Receipt into and Removal from an excise warehouse of excise goods.
3.3 What are the classes of beer?

The classes of beer are as follows: Class A B C D Type of beer Bulk beer held on the same or adjacent premises at which it was produced. Packaged beer held at the same or adjacent premises at which it was produced or packaged. Bulk beer, which was produced elsewhere. Packaged beer, which was produced elsewhere.
Brewers and their brewery premises will normally be registered to produce, hold and move the beer they produce in duty suspension classes A and B. Additionally they may be registered to receive and hold in duty suspension classes C and D.
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Packagers may be registered to hold the beer they have packaged in duty suspension class B and to receive and hold bulk beer in duty suspension for packaging class C.
3.4 When must I apply for registration?

At the very least 14 days before you intend to start brewing or wish to begin packaging in duty suspension.
3.5 Where do I find out how to apply?

See section 4 if you intend to brew beer and section 5 if you wish to be registered for packaging in duty suspension.
3.6 What happens after I have applied for registration?

We may wish to discuss your application with you. Once any queries on your application are settled we will send you a Certificate of Registration, which will confirm the date of registration and advise you of any conditions, which are applicable. You should keep the Certificate on the premises to which it refers as we may wish to see it from time to time.
3.7 How long will my registration last?

Registration will last until production/packaging has ceased. You must notify us in writing: if you intend to cease production/packaging, and when you have actually ceased production/packaging.
3.8 When would a registration be changed or revoked?

We will revoke a registration if a brewer ceases production, or a packager no longer packages bulk beer. Where we have reasonable cause, we may vary or revoke the terms of registration or restrict the premises, which are registered. When this is necessary, we shall give you notice of the changes in writing.
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3.9 Production by unregistered persons or on unregistered premises

Except where registration is not required (see paragraph 4.4), the production of beer by a person who is not registered, or on premises which are not registered is an offence for which there is a penalty. You can avoid a penalty by applying for registration at the correct time. If you have not applied for registration, you must notify us as soon as possible. We will be able to reduce the penalty. For further information on penalties, see link below. http://www.hmrc.gov.uk/about/new-penalties/faqs.htm You have the right to appeal if we impose such a penalty. For further information on appeals, see section 34 and link below. http://www.hmrc.gov.uk/dealingwith/appeals/indirecttax.htm
3.10
(a)
Is registration subject to conditions?
We may impose conditions affecting your registration. These may include: limitation of the extent of registered premises
(b) restriction of the classes of beer which may be received or held on registered premises, or (c) financial security for the duty on beer in duty suspension.
Any conditions we impose under (a) and (b) above will be included on your registration certificate, any other conditions will be notified to you in writing.
3.11 Will you register temporary storage facilities in association with registered premises?
If you have a temporary need for additional storage space (due to seasonal demand) you may apply for temporary registration of any premises under your control within five kilometres of your registered premises.
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4. Registration of producers 4.1 Do producers and their premises have to be registered?

You must be registered if you produce beer unless you are exempted under paragraph 4.4.
4.2 Which premises must be registered?

You must apply to register: (a) all breweries where you produce and hold beer in duty suspension and premises where you wish to receive beer in duty suspension for packaging, and (b) any adjacent premises you occupy, that is, not more than five kilometres from your premises registered under (a) above, on which you wish to hold beer in duty suspension.
4.3 How do I apply for registration?

You must complete an application in the form shown in section 32 and a detailed plan of your proposed registered premises. If the whole of your site is to be registered premises, the plan need only show details of the site perimeter. Please send them to the: HM Revenue & Customs National Registration Unit (Alcohol and Tobacco) Portcullis House 21 India Street Glasgow G2 4PZ Phone: 0141 555 3489/3586 Fax: 0141 555 3506 If you have an enquiry once your application form has been sent, you may contact the National Registration Unit (NRU). For any enquiries before this stage, you should contact the Excise and Customs Helpline, phone 0845 010 9000. You must make a reasonable estimate of the volume of beer that will be produced in the current calendar year in your brewery and enter details in question 11 of the application form. You must make a note in your business records of how you have made the estimate. If you also wish to hold and/or package beer in duty suspension, which was produced elsewhere, you should make application for the relevant classes see paragraph 3.3.
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Note: From 1 February 2007, all producers applying for registration for the first time are required to arrange for a guarantee to cover any duty due on beer, removed from your registered premises to the UK home market, until it is paid to HM Revenue & Customs see section 6.
4.4 Exemption from registration

You do not need to apply for registration to produce beer in the following circumstances: brewing solely for your own domestic consumption, or brewing only for research or experimental purposes - see section 17.
4.5 Changes affecting your registration particulars

You must write to the National Registration Unit (see paragraph 4.3 for address and phone/fax numbers) giving details of any changes that may affect your registration. The following changes would require a new application to be completed: change of legal entity, for example, formation of a limited company, or change in the ownership or control of your business (in the case of a sole proprietor or partnership).
The following other changes must also be notified in writing: change of address of your registered and/or adjacent premises change of name of the registered person, for example, change of company name change of bank account details change of your duty guarantor cessation of production or packaging the production of other excisable goods on your registered premises financial difficulties/impending insolvency, or you become VAT-registered or de-registered.
Also, you must apply in writing to make any changes to the classes of beer you are registered to hold.
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5. Registration of packagers 5.1 Do I have to apply for registration?

If you package but do not produce beer (that is you put bulk beer produced elsewhere into containers) you must apply for registration if you wish to package the beer in duty suspension. If you repack packaged beer (for example, reformat 24 can packs into 15 can packs, or repack into special promotion cartons) you are a secondary packager. You cannot apply for registration under the Beer Regulations 1993 but, if you wish to pack in duty suspension, you may apply for authorisation of your premises as a trade facility warehouse under the terms of Notice 197 Excise goods: Receipt into and Removal from an excise warehouse of excise goods.
5.2 What does registration cover?

Registration covers persons and their premises, in which they wish to receive duty suspended bulk beer for packaging and subsequent storage.
5.3 What premises may be registered?

All premises where you intend to package duty suspended bulk beer, and any adjacent premises you occupy, that is, not more than five kilometres from your premises registered under above, on which you wish to hold bulk beer for packaging, or beer, which you have packaged.
5.4 How do I apply for registration?

You must complete an application in the form shown in section 32 and a detailed plan of your proposed registered premises. If the whole of your site is to be registered premises, the plan need only show details of the site perimeter. Please send them together to the National Registration Unit (see paragraph 4.3 for address and phone/fax numbers). If you have an enquiry once your application form has been sent, you may contact the National Registration Unit (NRU). For any enquiries before this stage, you should contact the Excise and Customs Helpline, phone 0845 010 9000. To obtain a direct debit mandate form, you should contact the Beer Duty Accounting Centre (see paragraph 4.3 for address and phone/fax numbers).
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Note: From 1st February 2007, all packagers applying for registration for the first time are required to arrange for a guarantee to cover any duty due on beer, removed from your registered premises to the UK home market, until it is paid to HM Revenue & Customs see section 6.
5.5 Changes affecting your registration particulars

You must write to the National Registration Unit (see paragraph 4.3 for address and phone number) giving details of any changes that may affect your registration. The following changes would require a new application to be completed: change of legal entity, for example, formation of a limited company, or change in the ownership or control of your business (in the case of a sole proprietor or partnership).
The following other changes must also be notified in writing: change of address of your registered and/or adjacent premises change of name of the registered person, for example, change of company name change of bank account details change of your duty guarantor cessation of packaging the production of other excisable goods on your registered premises financial difficulties/impending insolvency, or you become VAT-registered.
6. Financial security 6.1 What is financial security?

For the purpose of this notice financial security is a guarantee given by an approved guarantor who undertakes to pay money to us in the event of an irregularity covered by the guarantee. Guarantees are the only form of security acceptable to us.
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6.2 Why is a guarantee required?

We require a guarantee to: (a) safeguard the duty on all duty suspended intra-EU movements of beer - see Notice 197 Excise goods: Receipt into and removal from an excise warehouse of excise goods.
We may require guarantees for: (b) (c) beer held in duty suspension on registered premises, and movement of beer within the UK.
We also require a guarantee to: (d) safeguard the duty due on beer that has been produced in the UK and has passed the duty point but upon which duty has not been paid to HM Revenue & Customs - see paragraph 6.4.
6.3 How do I arrange for a guarantee?

If a guarantee is required under 6.2 (a), (b) or (c) above, you must complete an application in writing and send to the: HM Revenue & Customs National Registration Unit (Approvals Team) Portcullis House 21 India St Glasgow G2 4PZ Once we have agreed your guarantee amount, we will issue the draft wording to your guarantor for completion of the guarantee form and return to the National Registration Unit. If satisfied, we will accept the guarantee and return a signed copy to the guarantor. You may use the guarantee when you have confirmed that your guarantor has received the signed acceptance copy from us.
6.4 What is EPSS (Excise Payment Security System)?

A guarantee is required to cover any duty due on beer, removed from your registered premises to the UK home market, until it is paid to HM Revenue & Customs (no later than the 25th day of the month following the accounting period). This will apply to all brewers and packagers applying for registration for the first time see paragraphs 6.4.3 and 6.4.4. If you meet the exemption criteria, you are eligible to apply for authorisation to make payments without providing a guarantee see paragraphs 6.4.1 and 6.4.2.
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6.4.1 How do I apply for authorisation to make payments without providing a guarantee?
You must complete an application form EPSS(B) Excise Payment Security System (EPSS): application for authorisation to make payments of excise duties without a guarantee which can be found on the HMRC website or obtained from the EPSS Authorisation Team (see paragraph 6.4.3 for address and phone number). You must send the completed application form to the EPSS Authorisation Team.
6.4.2 What are the EPSS authorisation criteria?

If you are VAT registered, you will be assessed against the full EPSS authorisation criteria, which includes checks on your VAT and Excise compliance history. If you are trading beneath the VAT registration threshold, you will not be assessed against the full authorisation criteria. You will not be eligible unless you have been registered in an Excise payment regime for three years or more. Authorisation checks will be made on your Excise returns/payments and compliance history. EPSS eligibility and authorisation criteria can be found on our website.
6.4.3 How do I arrange for a guarantee if I do not qualify for EPSS?

Your guarantor must complete form C1201 BDAC (Guarantee for payment of sums due to the Commissioners of HM Revenue & Customs) which can be found on our website or obtained from the: EPSS Authorisation Team Ruby House 8 Ruby Place Aberdeen AB10 1ZP Phone: 01224 404 880 You must send the completed form to the: HM Revenue & Customs Beer Duty Accounting Centre Queens Dock Liverpool L74 4AA Your guarantee amount should be set at a maximum amount that is sufficient to cover all the duty likely to be due, on beer removed from your registered premises to the UK home market, in any given accounting period. Note - registered brewers who have premises that are also approved as an Excise warehouse will be required to have a separate deferment guarantee to cover any duty due on removals from the Excise warehouse.
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6.4.4 What happens if I do not provide a guarantee?

If you fail to provide a guarantee, you will be required to pay the duty due when the duty point occurs, that is, as soon as you produce beer, rather than delaying payment of the duty until the 25th day of the following month.
6.5 Who can act as a guarantor?

Only companies approved by us may act as guarantors. Most banks and insurance companies have this approval, but if you want to check a particular company please contact the National registration Unit (see paragraph 6.3).
6.6 How much will my guarantee cost me?

The cost of the guarantee is a commercial arrangement between you and the guarantor.
7. Duty liability 7.1 When does beer become liable to duty?

Beer becomes liable to duty once it has been produced or when it is imported into the United Kingdom.
7.2 When is beer produced?

We have the power to determine the point of production, however, unless we have notified you otherwise, the production of beer normally begins when the mash is made and beer is produced when the earliest of any of the following events takes place: The time when: the beer is put into any package beer is removed from the brewery beer is consumed the beer is lost (see section 10), or beer reaches that state of maturity at which it is fit for consumption.
In relation to the above events, 'beer' includes unfinished beer.
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7.3 What is the duty point?

Paragraph 7.2 explains when beer becomes liable to duty, but duty only becomes payable when the beer passes the duty point, that is when it leaves duty suspension. In addition, beer is considered to have left duty suspension when there is a failure to comply with any requirements relating to the duty suspension arrangements. Duty ceases to be suspended when: (a) the beer leaves registered premises, unless it is delivered: to other registered premises to an Excise warehouse for exportation or shipment as stores to entitled diplomats, or to entitled members of visiting forces
(b) the beer is received by registered premises not entitled on their registered holder certificate to hold that class or description of beer (c) (d) (e) (f) (g) (h) (i) the beer is constructively removed (see paragraph 7.5) the beer is consumed the beer is lost the beer is irregularly diverted you are no longer registered the premises on which you are holding the beer cease to be registered, or the beer is produced and you are not registered to hold beer in duty suspense.
7.4 When must I pay the duty?

Normally, the duty should be paid by the 25th of the month following the calendar month in which the beer passed the duty point see section 16.
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7.5 Can I pay duty in advance of beer leaving registered premises?

If you consider that it would help your business to account for duty on any duty suspended beer in advance of delivery from registered premises, you may do so. This is known as 'constructive removal' and allows the registered holder of the beer to change the status of the beer held on registered premises from duty suspended to duty paid, on payment of the proper duty, without the need to remove the beer from those premises. The duty should be paid by the 25th of the month following the calendar month in which the beer was constructively removed. The following requirements have the force of law and are made under regulation 15A(3) of the Beer Regulations 1993. You must record: the date of any change of status of any beer from duty suspended to duty paid, and the product(s). Note When beer has been constructively removed, it cannot be returned to duty suspension in registered premises. You can return beer to duty suspension if it is being subsequently warehoused for export in an Excise warehouse. You must observe the conditions of the drawback system which are contained in Notice 207 Excise duty: drawback.
7.6 What is the basis of the duty charge?

Duty is based on the quantity and alcoholic strength of the beer and the rate of duty applicable when it passes the duty point see sections 11 and 12. The rate of duty for brewers who produce more than 60,000 hectolitres is known as the standard rate and the current standard rate of duty can be obtained from the Excise and Customs Helpline, phone 0845 010 9000. Brewers with an annual production of not more than 60,000 hectolitres may be eligible for a reduced rate of duty see section 8.
7.7 How do I work out the duty figure at the end of the accounting period?
Unless HMRC has permitted the use of an alternative method of calculation that does not disadvantage the revenue, you must work out each stage of the duty calculation process to a minimum of four decimal places. However, in order to complete form EX 46 Beer Duty Return declaration, you should truncate quantity (that is, bulk hectolitres and hectolitres %) to two decimal places. Step Action
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Total the quantity of beer expressed to four decimal places at each particular strength, which has passed the duty point in the accounting period. Where necessary, convert the quantity to litres Divide litres by 100 to convert to hectolitres (Hl), expressed to two decimal places. Multiply the result by the strength of the beer to convert to hectolitre percent (Hl%), expressed to two decimal places. Add together all the Hl% totals for the beers of different strengths. Multiply the total Hl% by the applicable duty rate to find the duty figure.
2 3 4 5 6
The following is a simple example of the calculation of the duty figure using the standard rate of beer duty: Beer A 148 x 18 gallon kegs of beer x 4.2% Conversion factor: 1 gallon = 4.546 litres 4.546 x 18 = 81.828 litres per keg 81.828 x 148 = 12110.544 litres in total 12110.544/100 = 121.10544 Hl, truncated to 121.10 Hl 121.10 x 4.2 = 508.62 Hl% Beer B 1684 cases of beer, each containing 24 x 440ml cans x 3.7% 24 x 440mls = 10.56 litres per case 10.56 x 1684 = 17783.04 litres in total 17783.04/100 = 177.8304 Hl in total, truncated to 177.83 177.83 x 3.7 = 657.971Hl %, truncated to 657.97 Beer C 898 cases of beer, each containing 24 x 275ml bottles x 3.8% 24 x 275mls = 6.6 litres per case 6.6 x 898 = 5926.8 litres in total
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5926.8/100 = 59.268 Hl in total, truncated to 59.26 59.26 x 3.8 = 225.188 Hl%, truncated to 225.18 Total Hl% = 508.62 657.97 + 225.18 + = 1391.77 Total duty payable = 1391.77 Hl% x duty rate of 16.47 = 22,922.451 truncated to 22,922.45 If you are eligible to a reduced rate of duty see paragraphs 8.24 to 8.26 for details of how to calculate your duty rate. Information about determining the quantity of beer for duty purposes is in section 11. For details of the beer duty return and duty payment, see sections 15 and 16.
7.8 How do I calculate the duty on mixedpacks?

You may produce packages containing products of different strengths and/or volumes. The calculation of volume and ABV for duty purposes on such packages is as follows: A mixed-pack contains: 4 x 440ml cans @ 3.2% ABV 16 x 500ml cans @ 5.1% ABV 4 x 500ml cans @ 9.0% ABV Volume calculation: 4 x 0.44 litres = 1.76 litres 16 x 0.50 litres = 8.00 litres 4 x 0.50 litres = 2.00 litres Total pack volume ABV calculation Multiply the volume of each beer by its ABV and total the results. Divide the total by the total pack volume to obtain the weighted ABV. 1.76 x 3.2 = 5.632 11.76 litres
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8.00 x 5.1 = 40.800 2.00 x 9.0 = 18.000 Total = 64.432 64.432 divided by 11.76 = 5.478 This is the weighted ABV and should be truncated to one decimal place for duty calculation purposes. The volume for duty of this mixed-pack is 11.76 litres and the ABV is 5.4%.
8. Small brewery beer 8.1 What is small brewery beer?

Small brewery beer is beer, other than that brewed under licence, produced by eligible breweries, whether in the UK or overseas. Small brewery beer is eligible for reduced rates of duty. Beer produced under licence is never small brewery beer and is always liable to the standard rate of duty.
8.2 What does 'produced under licence' mean?

Production under licence is where permission is given to a brewery to brew another brewery's beer. In order to determine whether or not production is licensed, the following factors will be taken into account: the relationship between you and the other brewery contracts of supply the name of the product, trade marks/labels and how it is marketed, and any other factors considered relevant.
8.3 How do I know if the beer I produce is small brewery beer?

8.3.1 As an existing brewer with a single brewery not connected with other breweries. You must satisfy all of the following conditions for the beer you produce to qualify as small brewery beer:
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no more than 60,000 hectolitres of beer may have been produced in your brewery in the previous calendar year see paragraph 8.10 less than half of the beer produced in the brewery in the last calendar year may have been produced under licence, and you must reasonably estimate that in the current calendar year your brewery will produce no more than 60,000 hectolitres of beer - see paragraph 8.7.
8.3.2 As an existing brewer connected to other small breweries. You must satisfy all of the following conditions for the beer produced in your brewery and any connected breweries: no more than a combined total of 60,000 hectolitres of beer in your brewery and any connected breweries may have been produced in the previous calendar year see paragraph 8.10 less than half of the beer produced in your brewery or any connected brewery in the last calendar year may have been produced under licence see below, and you must reasonably estimate that in the current calendar year your and any connected breweries will produce a combined total no more than 60,000 hectolitres of beer see paragraph 8.7.
This means that if one brewery in a group of connected breweries has licensed production of 50% or more, the whole group is excluded from the scheme. The licensed production in each individual brewery must be less than half of the total production of that brewery. See paragraph 8.25.2 for further details.
8.4 What is meant by 'connected breweries'?

If you produce beer in just one brewery at any time during a calendar year and you are not connected with any person (as described below), who also produces beer in any other brewery in that year, your brewery is a single brewery for the purpose of the reduced rates scheme. If you produce beer in more than one brewery during a calendar year, or you are connected with any person who produces beer in any other brewery in the year, your brewery is part of a group of connected breweries for the purposes of the reduced rates scheme.
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8.5 Connected breweries

Any question as to whether a person is connected with another is determined in accordance with section 839 of the Income and Corporation Taxes Act 1988. The definition of 'connection' is very wide but some examples of the circumstances in which people are 'connected' are set out below: Examples Individuals are connected A partner is connected with Companies under the same control are connected with by marriage, family relationships and the like. his/her business partners and their spouses. each other, and the persons controlling them. A person has control of a company if that person exercises, or is able to exercise or is entitled to acquire direct or indirect control over the companies' affairs. A company is connected with any shareholder (whether an individual or a company) which has control of the company, whether on its own or together with persons who are connected with the shareholder. as a result of their being controlled by connected persons, for example, husband controlling company A and wife controlling company B.
Companies are connected
8.6 Why does it matter if I have more than one brewery or am connected to another brewer in some way?
This is to prevent, for example, a large business being artificially split into a number of small breweries, each of which would individually be below the 60,000 hectolitres limit.
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8.7 How do I make a reasonable estimate of the current calendar year's production?
You must take all of the relevant factors into account including any contracts you already have to supply beer and any expansion plans. It is important you make this estimate honestly. If you make an untrue estimate by stating the brewery will produce 50,000 hectolitres in the current calendar year when you know that a reasonable estimate would be 70,000 hectolitres, we can recover all of the duty underpaid.
8.8 Do I have to notify you of my estimate?

You only have to tell us how much beer you reasonably estimate that you will produce in a brewery when you apply for registration with us in respect of that brewery. You don't need to notify us of subsequent estimates but you must record in your business records of each calendar year's estimate at the time you make it, together with details of how you arrived at the estimate. This information must be kept in the form of a Beer Production Account see paragraph 8.9.
8.9 Beer Production Account

The following requirements have the force of law and are made under regulation 6 of the Revenue Traders (Accounts and records) Regulations 1992. You need to keep a Beer Production Account showing the following information: Estimate of current year's production You must keep a record of your estimate of the current year's production (see paragraph 8.7) together with details of how you arrived at the estimate. Previous calendar year's actual production (to be recorded each month) The calendar month and year in question. The total quantity (in bulk hectolitres to two decimal places) of beer that you have produced in that calendar month split if appropriate between your own beer and beer you have produced under licence. The quantity should NOT be reduced to take account of any beer you subsequently determine to be spoilt or unfit for use or for any returned spoilt beer. At the end of each calendar year, your annual production totals shown in the Beer Production Account will determine your continued eligibility for the scheme and the reduced rate for the following year.
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In addition to the Beer Production Account, all brewers are required to keep a Beer Duty Account, details of which can be found at section 13.
8.10 Do I need to make an estimate at the beginning of each year?

Yes. To be eligible for the reduced rates scheme you must use the previous calendar year's production and your estimated production in the current year. Neither production total may exceed 60,000 hectolitres for you to be eligible.
8.11 How does a new brewer estimate current year's production?

He must make a reasonable estimate (see paragraph 8.7) of the amount of beer that will be produced in the brewery in the current year and, where appropriate, it must be grossed-up to arrive at a full calendar year's figure using the formula: E (365 N) x 365 Where E = the amount of your estimate and N = the number of days in the calendar year before the brewery started production. For example, it is intended to start producing beer on 1 August and it is estimated, based on the size of the plant, business plans and workforce, that in the five months to 31 December, the brewery will produce 6,400 hectolitres. Using the above formula, the grossed-up estimate is 15,268 hectolitres, being 6,400 divided by 153 (365 less 212 the number of days from 1 January to 31 July) multiplied by 365. Until such time as a reasonable estimate is made of the amount of beer that will be produced in the brewery in the current calendar year by the person who first produces beer in that brewery in that year, no beer produced there is small brewery beer. This applies equally to a group of connected breweries: that is, where, at any time during the year, a reasonable estimate of production does not exist for any brewery within that group (which is made by the person who first produces beer in that brewery in that year), none of the beer produced in the group is small brewery beer.
8.12 What if I know that my production in the current year will exceed 60,000 hectolitres?
You should account for duty at the full standard rate from the beginning of the current year.
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8.13 What if my production in the current year exceeds my estimate and 60,000 hectolitres?
Provided that you reasonably estimated that production either in a single brewery or a group of connected breweries would not exceed 60,000 hectolitres in the current year, then the first 60,000 hectolitres of beer will be small brewery beer and subject to a reduced rate of duty. Any beer over that amount will not be small brewery beer and will be subject to the standard rate of duty. If you made an untrue estimate that production would not exceed 60,000 hectolitres but it does, then none of the beer is small brewery beer and the full amount of beer produced in that year will be subject to the standard rate of duty.
8.14 What is included in the previous calendar year's production figure?

This is the total quantity of beer produced by a brewery or group of connected breweries in the previous calendar year and includes all beer you have brewed, whether for yourself or for another brewer or third party. It is not the quantity of beer removed from the brewery. It is the quantity of beer brewed and put into tanks, casks, kegs, bottles, or any other receptacles of a kind in which beer is distributed or sent in bulk to be packaged elsewhere, It includes any beer in stock at the end of the year, any beer consumed on the premises and any beer used for sampling or research. You must not reduce the production figure by any beer returned to you as spoilt beer. Details of your production must be kept in the form of a Beer Production Account see paragraph 8.9.
8.15 What if beer production started partway through the last calendar year?
If you started to produce beer in a brewery part-way through a year, you must grossup the actual production for the period that beer was produced to arrive at a full calendar year's figure using the formula: A D x 365 Where A = the amount of beer produced in the brewery in the previous year and D = the number of days in that part of the previous year.
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For example, a brewery started production on 1 April and during the period to 31 December 3,850 hectolitres was produced. Using the above formula, the calendar year production figure for the purposes of the reduced rates scheme is 5,110 hectolitres, being 3,850 divided by 275 (the number of days from 1 April to 31 December) multiplied by 365.
8.16 What if more than one person produced beer in the same premises during a calendar year?
(a) Where more than one person produced beer in the premises in that calendar year and there was no break in production, the production figure for the purposes of the reduced rates scheme will be the combined total of each person's production in that year. For example, company A produced 4,650 hectolitres of beer in the premises from 1 January to 30 September and then sold the premises to company B which produced 1,525 hectolitres in the premises from 1 October to 31 December, the brewery's production figure for the purposes of the reduced rates scheme is 6,175 hectolitres the sum of company A and company B's production figures. (b) If there was any time during that year when the brewery was not used to produce beer, for example, company A ceased production in July but only sold the business to company B in September, the two companies' production figures must be grossed-up using the formula in paragraph 8.15. For example, company A produced 2,750 hectolitres of beer during the period 1 January to 15 July and company B produced 1,175 hectolitres between 1 September and 31 December. The grossed-up calendar year production figure for the brewery will be 4,505 hectolitres, being 3,925 (2,750 + 1,175) divided by 318 (the number of days on which the brewery was used to produce beer) multiplied by 365. In either case, company B will need to know details of company A's previous production. In the case of a transfer of a going concern, the business records, including the Beer Production Account should be transferred to the new owner.
8.17
What if I share brewery premises?
Where persons share the use of the brewery premises to produce beer in a calendar year, the production figure for the purposes of the reduced rates scheme will be the total production within the brewery in that year. For example, company A produced 3,350 hectolitres of beer in the premises from 1 January to 31 December and company B produced 2,675 hectolitres in the same premises from 1 January to 31 December, the brewery's production figure for the purposes of the reduced rates scheme is 6,025 hectolitres the sum of company A and company B's production figures. Therefore, each person will be applying the same rate to any small brewery beer that they produce.
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8.18 How do production rules apply to breweries that are part of a group of connected breweries?
If the group comprises, for example, six breweries, four of which have been in production for the whole of the previous calendar year, one of which began to produce beer part-way through that year and one is to start producing beer during the current year, you simply determine each brewery's actual or deemed production figure (as explained in the paragraphs above). You will need to add all of those figures together to arrive at the group's production figure for the purpose of the reduced rates scheme.
8.19 What if I am moving small brewery beer that I have produced in duty suspense in the UK?
The general requirements for the movement of duty suspended beer are set out in section 9. In addition, you must also include a certificate, as follows: 'It is hereby certified that the beer described is 'small brewery beer' in accordance with either section 36C or section 36E of the Alcoholic Liquor Duties Act 1979 with an annual production of [insert] hectolitres of beer ' NB. Section 36C refers to 'small brewery beer': beer from singleton breweries and Section 36E to 'small brewery beer': beer from co-operated breweries. This will enable the person who removes the goods from duty suspension to establish that the beer is small brewery beer and calculate the reduced duty rate payable. Your normal commercial despatch documents will be suitable if they contain all the information shown in paragraph 9.11 including the required certificate. However from 1 January 2011 you will need to use the Excise Movement Control System (EMCS) when moving beer within the UK, unless the movement qualifies for the simplification procedures for certain intra-UK movements. Please see paragraph 9.12 which gives details of the criteria for the simplification procedures. For further information on EMCS please see Notice 197 Excise goods: Receipt into and removal from an excise warehouse of excise goods.
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8.20 What if I am receiving small brewery beer in duty suspense?

To establish that the beer is small brewery beer you will need a certificate (as set out in paragraph 8.19) from the producing brewery, which you should retain in your records. Without this certificate you will not be able to demonstrate that the beer is small brewery beer and you will not be able to account for duty on that beer at the reduced rate.
8.21 What if I am moving small brewery beer in the UK produced by someone else?
Whether you operate brewery registered premises or an Excise warehouse, the records you are required to keep will contain details of the beer in question including the certificate (referred to in paragraph 8.19) provided by the supplier. When moving the beer to another party in duty suspense, you should provide the certificate that accompanies the movement.
8.22 What if I import beer from other EU Member States?

Beer produced by small breweries in other Member States and imported into the UK, which meets the requirements of the UK scheme, is small brewery beer and eligible for the reduced rates. Whether you import such beer into brewery registered premises, to an Excise warehouse, through a Registered Consignee or Temporary Registered Consignee, you may claim the reduced rate applicable. You will need to establish in advance of the importation that the brewery and the beer are eligible under our rules. If it is, the person, in the other member state consigning the goods to you, should include in box 23 of the accompanying document a certificate, as follows: (a) for beer moved in duty suspension under an Accompanying Administrative Document 'It is hereby certified that the product described has been brewed by an independent small undertaking with a production in the previous year of [insert] hectolitres of beer' From the 1 January 2011 all EU movements will be sent via EMCS . When small brewery beer produced by other member states is travelling via EMCS the statement (above) that beer is 'small brewery beer' will be required on the Electronic Administrative Document - E-AD (under EMCS). For further information on EMCS please see Notice 197. (b) for beer moved duty paid under a Simplified Accompanying Document
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'It is hereby certified that the beer has been brewed by an independent small undertaking with a production in the previous year of [insert] hectolitres of beer'. The slightly different wording of these certificates reflects variations in EU legislation. The certificate should be retained in your records and will enable you to calculate the appropriate reduced duty rate when paying the duty. This arrangement will continue for beer moving duty paid under a Simplified Accompanying Document after 31 December 2010.
8.23 What if I import beer from a country outside the EU?

Beer produced by small breweries in third countries and imported into the UK that meets the requirements of the UK scheme is small brewery beer and eligible for the reduced rates. You will need to establish in advance of the importation that the brewery in the other country and the beer are eligible under our rules. If it is, the person, in the other country consigning the beer to you, should provide a certificate endorsed by the relevant authorities in that country, as follows: 'It is hereby certified that the product described has been produced by an eligible small brewery with a production in the previous year [insert] hectolitres of beer'. You should endorse the appropriate import documentation with the statement above. The certificate should be retained in your records and will enable you to calculate the appropriate reduced rate when paying the duty. If goods are to be moved in excise duty suspension registered consignor procedures will apply see Notice 197 which can be accessed via our website.
8.24
8.24.1
Single brewer
How do I calculate my reduced rate of duty?
If you are a single brewer who does not produce any beer under licence for other brewers and have established your entitlement to the reduced rates scheme, you will either have calculated or estimated your beer production in the previous calendar year. This production figure will determine the reduced rate of beer duty that will be payable in the current year. If you only started production in the current year, you will have made an estimate of the current year's production. This production figure will determine the reduced rate of beer duty that will be payable in the current year.
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If the production figure is not more than 5,000 hectolitres, the reduced rate is 50% of the standard rate. Where the reduced rate results in part pennies, it must always be rounded up to the nearest penny. If the production figure exceeds 5,000 hectolitres but does not exceed 30,000 hectolitres, you will need to calculate the reduced rate using the following formula: P 2,500 (hectolitres) x the standard rate P Where P = the actual or deemed production in the previous calendar year (or the current year's estimated production for brewers who only started production in the current year). For example, if you produced or were deemed to have produced 7,569 hectolitres of small brewery beer in the previous calendar year (or current year's estimated production for brewers who only started production in the current year). If the standard rate of duty is 16.47, your reduced rate would be calculated as follows: 7,569 2,500 x 16.47 = a reduced rate of 11.03 7,569 Your duty rate in the current calendar year would, therefore, be 11.03. If the production figure exceeds 30,000 hectolitres but does not exceed 60,000 hectolitres, you will need to calculate the reduced rate using the following formula: P 2,500 8.33% of P in excess of 30,000 hectolitres) x standard rate P For example, if you produced or were deemed to have produced 40,000 hectolitres of small brewery beer in the previous calendar year (or current year's estimated production for brewers who only started production in the current year). If the standard rate of duty is 16.47, your reduced rate would be calculated as follows: 40,000 (2,500 8.33% of 10,000) x 16.47 = a reduced rate of 15.79 40,000 Your duty rate in the current calendar year would, therefore, be 15.79. Remember that you will need to carry out this type of calculation at the beginning of each calendar year based on your production in the immediate preceding year.
8.24.2 What if I produce my own beer and brew under licence for another brewer?
Beer brewed under licence for other brewers is not eligible for reduced rates of duty.
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If the beer you produced under licence constitutes 50% or more of your total production in the previous calendar year, none of the beer you produce in the current calendar year is eligible for a reduced rate as small brewery beer. You will have to pay the standard rate of beer duty on all of the beer you produce. If you are a single brewer who does produce beer under licence for other brewers and have established your entitlement to the reduced rates scheme you will either have calculated or estimated your beer production in the previous calendar year. This production figure, which must include licensed production, will determine the reduced rate of beer duty that will be payable in the current year on that beer which was not produced under licence. For example, if in the previous calendar year you produced (or estimated production of) 2,000 hectolitres of your own beer and 1,000 hectolitres under licence for another brewery. Your total combined production would be 3,000 hectolitres and as your production under licence constituted less than 50% of your total production you would be eligible for a reduced rate on your small brewery beer. In this example, with a total production of less than 5,000 hectolitres you would be eligible for the reduced rate of 50% on your small brewery beer in the current year, although any beer produced under licence would still attract the standard rate of duty. If your previous calendar year's total production exceeded 5,000 hectolitres but did not exceed 30,000 hectolitres, you will need to calculate the reduced rate of duty applicable according to the formula for this band. For example, if you produced in the previous calendar year (or estimated production of) 4,780 hectolitres of your own small brewery beer and 1,500 hectolitres under licence. Your total production would, therefore, be 6,280 hectolitres. With a standard rate of beer duty of 16.47, you would then calculate your reduced rate as follows: 6,280 2,500 x 16.47 = a reduced rate of 9.92 6,280 This means that your production of small brewery beer in the current calendar year would be eligible for the reduced rate of 9.92 provided your current year's estimated total production, including beer you brew under licence, does not exceed 30,000 hectolitres. Any beer produced under licence would still attract the standard rate of 16.47. If your previous calendar year's production exceeded 30,000 hectolitres but did not exceed 60,000 hectolitres, you will need to calculate the reduced rate of duty applicable using the formula for this band. For example, if you produced in the previous calendar year (or estimated production of) 35,000 hectolitres of your own small brewery beer and 15,000 hectolitres under licence. Your total production would, therefore, be 50,000 hectolitres. With a standard rate of beer duty of 16.47, you would calculate your reduced rate as follows: 50,000 (2,500 8.33% of 20,000) x 16.47 = a reduced rate of 16.20 50,000
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This means that your production of small brewery beer in the current calendar year would be eligible for the reduced rate of 16.20 provided your current year's estimated total production, including beer you brew under licence, does not exceed 60,000 hectolitres. Any beer produced under licence would still attract the standard rate of 16.47.
8.25
8.25.1
Part of a group of brewers

How do I calculate the reduced rate of duty?
If you are part of a group of brewers that does not produce beer under licence for other brewers, you will need to establish that the group is entitled to a reduced rate on the beer that it has produced. You must establish that the total production in the previous calendar year of all of the breweries in the group was not more than 60,000 hectolitres and that the current year's estimated production for all of the breweries in the group is not more than 60,000 hectolitres. When you have established the group's entitlement, you should calculate the applicable duty rate. If the group's total production figure in the previous calendar year is not more than 5,000 hectolitres, the reduced rate is 50% of the standard rate. Where the reduced rate results in part pennies, it must always be rounded up to the nearest penny. If the group's total production figure exceeds 5,000 hectolitres but does not exceed 30,000 hectolitres, you will need to calculate the reduced rate using the following formula: GP 2,500 (hectolitres) x the standard rate GP If the group's total production figure exceeds 30,000 hectolitres but does not exceed 60,000 hectolitres, you will need to calculate the reduced rate using the following formula: GP (2,500 8.33% of GP in excess of 30,000 hectolitres) x standard rate GP Where GP = the actual or deemed production of the group in the previous calendar year (or the current year's estimated production for brewers who only started production in the current year). The calculated reduced rate may be applied to the group's small brewery beer produced in the current year.
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8.25.2 What if the group produce both small brewery beer and beer under licence for another brewer(s)?
You must establish that the total production, including licensed production, in the previous calendar year of all of the breweries in the group was not more than 60,000 hectolitres and that the current year's estimated production, including licensed production, for all of the breweries in the group is not more than 60,000 hectolitres. You must then establish the licensed production in the previous calendar year of each individual brewery to ensure that it is less than 50% of the total production of that brewery. If the licensed production of any individual brewery is 50% or more of that brewery's total production, none of the group's beer is eligible for a reduced rate. For example, a group comprises three breweries with total production (or estimated production) in the previous calendar year of 20,000 hectolitres, which included 5,000 hectolitres of licensed production. Brewery A produced 12,000 hectolitres of which 3,000 hectolitres was licensed production. Brewery B produced 5,000 hectolitres of which 1,000 hectolitres was licensed production. Brewery C produced 3,000 hectolitres of which 1,000 hectolitres was licensed production. Each brewery satisfies the 50% licensed production rule, therefore, entitlement to a reduced rate has been established. The actual reduced rate is then determined in the same manner as described in 8.25.1. In the case of the example above: 20,000 2,500 x 16.47 = a reduced rate of 14.42 20,000
8.26 What if I receive small brewery beer in duty suspense for subsequent delivery to home use?
Whether a UK producer produced the small brewery beer or it has been imported, you must have a certificate from the producing brewer certifying that it is small brewery beer. Without this certificate you will have to pay duty at the standard rate.
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The certificate will state the production figure in the previous calendar year, which you will need in order to calculate the rate using the formula in paragraph 8.24.1. For example, if the production figure shown on the certificate from the producing brewer is 15,400 hectolitres (that is, not exceeding 30,000 hectolitres): 15,400 2,500 x 16.47 = a reduced rate of 13.80 15,400 As another example, if the production figure shown on the certificate from the producing brewer is 35,500 hectolitres (that is, exceeding 30,000 hectolitres but not exceeding 60,000 hectolitres): 35,500 (2,500 8.33% of 5,500) x 16.47 = a reduced rate of 15.53 35,500 This reduced rate should be used for calculating your duty liability on the consignment to which the certificate relates. At the beginning of each calendar year, the producing brewer will need to establish his continuing entitlement to the scheme and, if he is, he must ensure that the certificate has been updated to show the preceding calendar year's production.
8.27 How are reduced rates of beer duty accounted for?

Section 15 of this notice explains how to complete beer duty returns. Notice: 197 Excise goods: Receipt into and Removal from an excise warehouse of excise goods explains the procedures for removal by duty payment of goods from Excise warehouses 203A Registered Consignees explains the procedures for accounting for duty through the Registered Consignee regime and 204A Temporary Registered Consignees explains the procedures for accounting for duty through the Temporary Registered Consignee regime.
9. Duty suspension 9.1 What is duty suspension?

Duty suspension is the term used to refer to the storage, holding or movement of goods liable to Excise duty without payment of duty.
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9.2 How does duty suspension apply to beer?

Beer may be held in duty suspension on premises registered for that purpose, as explained in section 3. Beer may be stored in duty suspension in a warehouse, which has been approved by us. Beer can also be moved in duty suspension see paragraph 9.6.
9.3 Who can hold beer in duty suspension?

Only registered brewers, registered packagers or authorised warehouse keepers, approved to receive beer, can hold beer in duty suspension.
9.4 Who is responsible for the duty on beer in duty suspension?

The person holding or moving beer in duty suspension will be responsible for the duty on it. If beer cannot be accounted for to our satisfaction, that person will be liable to pay the duty on it.
9.5 What beer can I hold in duty suspension?

You can hold in duty suspension only those classes of beer which your registration allows see paragraph 3.3. These will be shown on your registration certificate.
9.6 Can beer be moved in duty suspension?

You can move beer in duty suspension in the following circumstances: between your registered premises and other registered premises or Excise warehouse see this section from your registered premises for: exportation see section 24 despatch to tax warehouses in other EU Member States see section 23 shipment as stores see section 26 delivery to entitled diplomats see section 25, or delivery to entitled members of visiting forces see section 25.
You can also receive beer in duty suspension, provided you are allowed to receive that class of beer: from other registered brewers or packagers from an Excise warehouse to your registered premises, or
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direct from importation to your registered premises, whether from EU Member States or other countries.
Note that if you send duty suspended beer to an Excise warehouse (approved under Section 92 of the Customs and Excise Management Act 1979) for bottling, packaging or storage, you will need to be approved as a registered owner of warehoused goods under the Warehouse keepers and Owners of Warehoused Goods Regulations 1999 (SI 1999/1278).
9.7 What must I do when I receive beer in duty suspension?

When you receive a consignment of beer in duty suspension you must: check the delivery against the document accompanying the beer, described in paragraph 9.11 currently, within 14 days issue a receipt to the consignor for the beer received. The receipt must contain the information shown in paragraph 9.15 and may be a copy of the delivery note, suitably endorsed from the 1 April 2010 you will need to issue a receipt within 5 days to the consignor for the beer received for intra EU movements on EMCS - for further information please see Notice 197 from 1 January 2011 you will need to issue a receipt within 5 days to the consignor for the beer received for Intra UK movements on EMCS, including movements using the simplified procedures record the issue of the certificate of receipt, (you may wish to keep a copy of it) enter the quantity received into your stock records, and keep the accompanying document.
9.8 What must I do before I move beer in duty suspension in the UK?
You must ensure that you are sending the goods to a brewer, packager or Excise warehouse which is registered or authorised to receive and store the appropriate class/classes of beer in duty suspension.
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9.9 How do I know that a trader is registered or authorised to receive and store beer?
You should contact the Excise and Customs Helpline, phone 0845 010 9000 to confirm whether or not the brewer, packager or Excise warehouse is registered to receive and store beer in duty suspension. We will keep a record of your request.
9.10 Will you supply details about conditions or restrictions?

We cannot legally supply this information.
9.11 What documents must accompany beer moving in duty suspension in the UK?
Up until 31 December 2010, if you move beer in duty suspension between registered premises or from registered premises to an Excise warehouse, it must be accompanied by a document containing the following information: a unique reference number your name and address the name and address of the consignee the destination address a statement that the beer is in duty suspension, and a description of the beer (that is, product name), the quantity, strength and package size and the date of despatch from your registered premises.
Note If the beer being moved is small brewery beer which you have produced, you must also include a certificate of eligibility to enable the person who delivers the beer onto the UK market to establish that the beer is small brewery beer and to calculate the reduced duty rate. You will find more information about this in paragraph 8.19. If you have been paid or expect to be paid in cash for the supply of beer in duty suspension (or for any service you provide in relation to beer in duty suspension), see paragraph 9.29. Your normal commercial despatch documents will be suitable if they contain all the information shown above including the required certificate. From the 1 January 2011 all intra UK movements will need to be made via EMCS unless they qualify for the simplified procedure and meet the criteria. For further information please see Notice 197.
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9.12 What are the new simplification procedures?

From 1 January 2011 beer moving in duty suspension will be moved via the EMCS system unless the movements meet certain criteria. Simplification procedures will apply to certain movements and these particular movements will be able to carry on using commercial documentation. The simplification procedures will be limited to certain movements between one registered brewery to another brewery within the same company or a brewery to a 3rd party packager, excise warehouse or beer store as long as the beer remains the property of the brewer. If the movement does not meet this criteria then it will be necessary to use EMCS.
9.13 Do I need a beer duty receipt?

From the 1 January 2011 this will only be applicable where simplified procedures apply. When you move beer in duty suspension to registered or authorised premises within the UK, you will be responsible for the duty on it until you receive a receipt from the consignee. The consignee must sign the receipt or a person properly authorised to act on behalf of the consignee. The receipt must contain the information shown in paragraph 9.15. If you fail to obtain a receipt within 4 months, you will be liable for the duty due on the beer, even though it is no longer in your possession see paragraph 9.13.
9.14 What should I do if I do not receive a receipt?

Currently the consignee must issue a receipt within 14 days (from the 1 January 2011 a receipt must be issued within 5 working days) of the date of receipt of the beer in their registered or authorised premises. If you do not receive a receipt, you should contact the consignee. If it appears that the receipt has been lost in transit, ask for a duplicate. Any such replacement should be clearly marked. If you have not obtained a satisfactory certificate of receipt for the beer within four months of its despatch, you must pay the appropriate amount of duty on your next return. If you subsequently receive a receipt, you may credit your duty account with the appropriate amount of duty. Any difficulty in obtaining certificates of receipt, within the appropriate time limit, should be referred to the Excise and Customs Helpline, phone 0845 010 9000. If no receipt is received, but at a later date you are able to provide alternative evidence of receipt, you will be able to produce this when our officer next visits you. If the alternative evidence is accepted, the officer will authorise a duty credit. Our officer will contact or visit consignees who fail to issue the necessary receipts.
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Failure to issue receipts may result in the issue of civil penalties. Note that if you do not hold a valid certificate of receipt for any beer you have sent out in duty suspension, you will be jointly and severally liable to pay the duty with the person who held the beer at the duty point.
9.15 What if the receipt shows a discrepancy?

If the certificate of receipt from the consignee shows that the beer they received differed from that shown on the document accompanying the beer, you should investigate the discrepancy, record the reason and adjust your records as necessary. Duty must be brought to account on any loss where there is no acceptable explanation.
9.16 What information must be shown on the receipt?

The following information must be shown on a beer duty receipt: a unique reference number the name and address of the consignor the date of receipt the name and address of the consignee the address where the beer was received a statement that the beer is in duty suspension, and a description of the beer (that is, product name), the quantity, strength and package size.
Personnel authorised by the registered person must sign the receipt. In addition, the signatory's printed name together with the date of signature must appear on each receipt. This only applies up until 31 December 2010 or where the consignment meets the criteria for the simplification procedures.
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9.17 What if there is a discrepancy between beer received and the accompanying document?
You must issue a receipt only for the beer you actually receive. If the copy of the delivery note is being used as a certificate of receipt, you must mark it clearly to show the discrepancy. In any event, you must inform the consignor about any discrepancy.
9.18 What happens if beer is accidentally destroyed whilst moving in duty suspension?
You should inform us if beer moving under duty suspension is accidentally destroyed, for example, in a road accident. Any significant losses should be notified to the Excise and Customs Helpline, phone 0845 010 9000 without delay. Provided we are satisfied that the beer has not been or will not be consumed duty will not be payable. It is important that you retain any information relating to the incident for our inspection.
9.19 May I receive beer returned under duty suspension?

Yes. Since the beer has not passed a duty point you may receive it back into your brewery on the original delivery documentation.
9.20 What conditions must I observe if I wish to return duty suspended beer?
Duty suspended beer must always be moved in accordance with the detailed procedures laid down in this section. The beer must be subject to the normal requirements of measurement of volume and strength. Proper documentation must travel with the beer and proper certificates of receipt must be obtained. You may need to provide security for the duty as explained in section 6.
9.21 May I destroy duty suspended beer without having to pay the duty?
Yes, as long as you follow the procedures in paragraphs 9.21 and 9.22.
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9.22
What notice of destruction must I give?
You must give us at least five working day's notice if you wish to destroy beer outside your registered premises. You must give details of the proposed method of destruction. You must satisfy us that your proposed process will destroy the intrinsic nature of the beer. Working days excludes Saturdays, Sundays and public holidays.
9.23

What information must I give you?

why you wish to destroy the goods details of the goods the amount of duty involved where and when the proposed destruction will take place, and the method of destruction.
You must tell us:
9.24 Are there any conditions for duty suspended beer destroyed away from registered premises?
Yes. If the beer is removed from registered premises to be destroyed at a specialist destruction site, the conditions below apply. The following conditions have the force of law and are made under regulation 33A(1) of the Beer Regulations 1993. there must be a complete audit trail which confirms the beer has been destroyed the destruction of the beer must be supervised by either: an ACR of the brewery, or a person within the specialist destruction company who has been appointed by the brewery 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.
9.25 In what circumstances will you allow me to destroy duty-suspended goods without payment of duty?
We may grant permission if the goods are:
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damaged, or in a non-marketable condition.
9.26 When does beer leave duty suspension?

Beer leaves duty suspension (passes the duty point), when any of the following occur: (a) the beer leaves registered premises unless it is delivered: to other registered premises to an Excise warehouse for exportation for shipment as stores to entitled diplomats, or to entitled members of visiting forces.
(b) the beer is received by registered premises not entitled on their registered holder certificate to hold that class or description of beer (c) (d) (e) (f) (g) (h) (i) the beer is constructively removed the beer is consumed the beer is lost the beer is irregularly diverted you are no longer registered the premises on which you are holding the beer cease to be registered, or the beer is produced and you are not registered to hold beer in duty suspense.
9.27
What records must I keep?
You need to keep a record of every delivery and receipt of beer under duty suspension arrangements showing the date the beer is delivered or received. The following requirements have the force of law and are made under regulation 6 of the Revenue Traders (Accounts and Records) Regulations 1992. You must keep an up to date stock record of all beer held in duty suspension
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showing the quantity, strength and description of the beer (that is, product type), in relation to the following: beer produced on your registered premises beer received from other registered premises, from importation, other EU Member States, or authorised warehouses beer delivered from your registered premises on payment of duty beer delivered from your registered premises duty suspended, including exports, despatches to other EU Member States, shipment as stores, deliveries to entitled diplomats and entitled members of visiting forces beer appropriated for consumption on your registered premises beer removed for sampling purposes beer removed for reprocessing beer removed for destruction beer constructively removed, and beer lost or accidentally destroyed. Receipts of stock must include goods received from your own production and should be cross-referred to goods received records. Deliveries from stock should be cross referred to goods despatched records.
9.28 Can I hold duty paid beer on my registered premises?

Yes, in addition to beer which you have constructively removed (see paragraph 7.5) you may hold other duty paid beer in your registered premises, but only if we are satisfied that you can clearly identify duty paid and duty suspended beer in your records.
9.29
Do I have to pay duty on samples?
You will not normally have to pay duty on samples taken for testing for production or quality control purposes from duty suspended beer held on registered premises. Provided you keep a record of samples taken from such beer and our officer is satisfied that these samples have not been released for consumption, no duty is payable. Duty must be paid, however, on beer used for market testing, for example, consumption by potential customers visiting the brewery. There is no duty relief for samples taken from duty paid beer.
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9.30 Notification of cash transactions

As a registered brewer/packager, you are required to notify us if you have been paid, or expect to be paid, in cash for the supply of duty suspended beer exceeding 9000. You must complete form W7 Notification of cash payments for alcohol goods or alcohol related services in duty suspension which can be found on our website or the Excise and Customs Helpline on 0845 010 9000. You must send the completed form by fax or email to the: National Warrant Processing Unit Fax: 0131 469 7321 Email: Warrant Processing Unit If you are paid, or expect to be paid, in two or more instalments, which individually are below the 9,000 notification threshold but in total will exceed this amount, you must also notify us on form W7 when the first cash payment is received. Provided you have notified the transaction to us, you do not need to wait for us to respond to receipt of the W7 before removing duty suspended beer to other registered premises or Excise warehouses. You are also required to notify us of any cash payments received (exceeding 9,000) for any service you provide relating to duty suspended beer, for example, storage facilities, handling charges, packaging of beer or use of an Excise movement guarantee.
10. Irregularities, losses and deficiencies in registered premises 10.1 What are my responsibilities as a registered brewer/packager?
As a registered brewer/packager, you are responsible for the control of beer in your registered premises. You must have the necessary systems in place to control and safeguard your stocks. You must examine critically all losses and deficiencies.
10.2 If I accidentally lose duty suspended beer, do I have to pay the duty?
No, providing we are satisfied that the beer has been lost in registered premises and has not been consumed.
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10.3 What records of losses do I have to keep?

You need to keep records of production and processing and these should indicate how much beer you lose during routine operations. For example, the losses you normally incur during packaging operations. The following requirements have the force of law and are made 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 the description (product name) and the volume of beer lost, and the alcoholic strength if the loss occurred after production has been completed, and the reason why the accidental loss occurred.
10.4
What about unexplained losses?
If beer cannot be accounted for after the start of production and there is no acceptable explanation, you are liable for duty on the missing beer. It is therefore in your own interest to keep proper records of all losses.
10.5 Can I offset stock losses against surpluses?

Only if, in the absence of documentary evidence, you can demonstrate that stock losses and surpluses are related. Your records must contain written details of the reasons why any offsetting was carried out in order to justify the adjustments made to stock records following investigation of gains and losses. You must justify each offset. We do not allow you to accumulate losses and surpluses from various sources and then offset gross totals.
10.6
Losses of duty paid beer
Normally there is no duty relief in respect of beer which is lost after it has passed the duty point.
10.7 If duty suspended beer is spoilt, do I have to pay the duty?

No, providing we are satisfied that the beer has been unintentionally spoilt, contaminated or otherwise rendered unfit for consumption in the registered premises and has not been consumed.
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10.8 What records of spoilings do I have to keep?

The following requirements have the force of law and are made under regulation 6 of the Revenue Traders (Accounts and Records) Regulations 1992. You must record: the date and time of spoiling the description (product name) and the volume of beer spoilt and the alcoholic strength if the beer was spoilt after production has been completed, and the reason why the beer was spoilt.
11. Measurement of quantity 11.1 General
We can require duty to be accounted for on the actual quantity of beer in each container as it passes the duty point. However, most packagers do not measure the quantity in each container as they use the 'average system' of quantity control. Under this arrangement, which is used widely throughout the European Union, the average contents of packages must not be less than the declared contents (that is, that marked on the can or bottle or label or, in the case of kegs and casks, on the invoice or delivery note). Within specified limits the actual contents of any particular container may be more or less than the declared contents. Packagers using the average system conform to Weights and Measures Codes of Practice issued by the BBPA and agreed with Trading Standards. SIBA have a similar Code of Practice on the contents of kegs and casks. Packagers are obliged to monitor and record the actual quantity of beer in a proportion of packages to ensure they fulfil the Code's requirement.
11.2
Small Pack
11.2.1 What method should be used for ascertaining quantity in small pack?
Small pack refers to containers of 10 litres capacity and less. Packagers are required to fill these containers in accordance with 'average contents' rules (the system referred to in paragraph 11.1). The quantity of beer in a container will be treated as the average of the samples taken for the purpose of complying with average contents rules.
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11.2.2 When I produce beer in small pack, what quantity do I use for duty purposes?
When using the average system of quantity control, duty should normally be charged on the contents declared on the container for beer delivered in small packages such as cans and bottles. Evidence of compliance with Weights and Measures legislation will be sufficient to accept the labelled contents as the duty base, unless there are grounds for believing that deliberate duty avoidance is involved. Packagers should exercise 'due diligence' to ensure not only that the can or bottle contains on average at least the amount of beer stated on its label, but also that any volume in excess of the declared contents is minimised.
11.2.3 How do I demonstrate that 'due diligence' has been observed?

You should monitor the filling process to ensure that the quantity put into the package does not regularly excessively exceed the amount declared on the container. You should record these checks and provide an adequate audit trail to satisfy our officer that 'due diligence' is being exercised. Where there is evidence of consistent excessive overfilling, additional duty will be due.
11.2.4
When should the additional duty be paid?
Duty becomes payable at the end of the accounting period in which a container of beer is delivered to home-use. That is, when it passes the duty point. Where you have incurred an additional duty liability as a result of overfilling, the additional duty should be paid in the relevant accounting period when beer is supplied to home use from your registered premises or from registered premises or Excise warehouses owned or operated by your company. In the case of overfilled containers of beer supplied in duty suspension to third parties, you should record details of these deliveries separately in your records. The law requires that the person, holding the goods at the time of their delivery to homeuse, is liable for the duty, including that on the volume in excess of the declared quantity. However, if we are satisfied that the third party was unaware that the container had been overfilled and that the third party is entirely independent of you, we will not normally seek to recover the additional duty due. In deciding whether or not to pursue the additional duty we will take into account the following factors: the relationship between you and the third party contracts of supply, if appropriate the price paid for the goods, and any other information considered relevant.
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If you fail to properly record and/or pay the additional duty due on excess volume that you have delivered to home-use, we will assess you for the additional duty due. If you cannot produce accurate records upon which the additional amount of duty can be readily established, including quantities delivered to home-use, we will use 'best judgement'.
11.2.5 Can I combine the results of monitoring the volume for two or more products?
For small pack, we will normally require you to assess the monitoring results separately for each product. However, if in exceptional circumstances, for example, where a small amount of a seasonal product is packaged and separate monitoring would produce an inequitable outcome, we will consider requests for combining the monitoring results for a number of products.
11.2.6
Where do I record the volume of beer delivered?
Your normal commercial records should be acceptable provided that they contain sufficient information for calculating duty. You will also need to enter the total volume of beer delivered during the accounting period on the beer duty return see section 15.
11.2.7 Why do I have to record the volume of beer delivered?

Apart from normal commercial considerations, you must record the volume of beer delivered because: the volume will affect the calculation of the duty if the delivery is under duty suspension and subject to pilferage, an accurate assessment of the loss will be needed, and our officers will want to satisfy themselves as to the accuracy and completeness of your systems and also on the adequacy of duty guarantees.
11.2.8 What arrangements are in place for cans with widgets?

If the widget you use retains beer, then that retained quantity need not be declared for duty purposes. You must carry out tests to confirm the average retention volume. This average retention must be agreed with HM Revenue & Customs. Once agreed, the 'due diligence' concept may be applied to the labelled quantity plus the retained amount.
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11.3
Large Pack
11.3.1 What method should be used to ascertain the quantity in large pack?
Large pack refers to containers in excess of 10 litres capacity up to a maximum of 400 litres such as kegs and casks. For containers with a capacity in excess of 400 litres, the quantity for duty purposes is the greater of the actual quantity despatched or that stated on the delivery note or invoice. Packagers of large pack containers customarily fill casks and kegs in accordance with 'average contents' rules (the system referred to in paragraph 11.1). The quantity of beer in a container will be treated as the average of the samples taken for the purpose of complying with 'average contents' rules. Under these rules, packagers are permitted some latitude in the sampling regime that they adopt. However, in determining volume for duty purposes, packagers will be expected to maintain a minimum sampling rate of one container per filling head per operating day or 0.1% of a production run in excess of 4,000 containers, the samples to be representative of the mix of containers filled. A copy of the sampling protocol you intend to use for the purpose of assuring compliance with 'average contents' rules and for duty purposes, should be sent to HM Revenue & Customs. Some smaller packagers do not take samples but use their containers as capacity measures. In order to meet the tolerance requirements in paragraph 11.3.2(d), these packagers should take steps to ensure that the average capacity of their population of containers is such that they are operating within the set limits. (One means of conforming to 'average contents' rules is by adopting the BBPA Code of Practice on the 'Contents of Kegs and Casks'. SIBA have a similar Code of Practice. The BBPA's associated guidelines on monitoring and control procedures specify a procedure for measuring the average capacity of a batch of containers.)
11.3.2 When I produce beer in large pack, what quantity do I use for duty purposes?
Keg and cask beer is sold by container description under the brewing industry Code of Practice (reference). The Code makes representations as to the batch average and minimum for each container description. The quantity of beer in any container will be treated as the amount ascertained by reference to any information on the label of the container or any information on any invoice, delivery note or similar document issued in relation to the beer, subject to the following conditions: (a) that you maintain records of the quantity of beer found in samples you take for the purpose of compliance with 'average contents' rules, and
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(b) that a proper record is kept of the monitoring and control procedures, including a statement of the sampling protocol, used for the purpose of assuring compliance with these rules, and (c) in the case of filling controlled by meter or weighing:
that, in the accounting period, the average volume of the samples for each container size from each racking line does not exceed the following tolerances: declared quantity plus 0.5 litres for containers intended to contain a volume not exceeding 100 litres, and declared quantity plus 0.5 per cent for containers intended to contain a volume above 100 litres but not more than 400 litres, or
(d) in the case of containers filled using other systems of control or filling to capacity: that, in the accounting period, the average volume of the samples for each container size from each racking line does not exceed the following tolerances: declared quantity plus 3 litres for containers intended to contain a volume exceeding 200 litres but not more than 400 litres declared quantity plus 2 litres for containers intended to contain a volume exceeding 100 litres but not exceeding 200 litres, and declared quantity plus 1 litre for containers intended to contain a volume of 100 litres and less.
These tolerances are set out in The Beer and Cider and Perry (Amendment) Regulations 2000 which came into force on 1 January 2001. Containers of 400 litres or more must be treated individually and duty is liable on the total contents. At the end of each accounting period, for each target population of containers, you should calculate the average volume from the measured volumes of the samples you have taken. These sample volumes are to be expressed to two decimal places and truncated if necessary. The accounting period average is to be truncated to one decimal place. This calculation should be performed for each racking line for each container size. Individual types of beer may also be treated separately if that is the rule established in your sampling protocol as part of your monitoring and control procedures.
11.3.3
What happens if I exceed the overfill tolerance?
In the cases of paragraphs 11.3.2(c) and (d), if the average volume of the samples in a target population of containers for a racking line exceeds the specified tolerance in any accounting period, there will be an additional duty liability when that beer is sent to home use.
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The volume on which additional duty is then liable is the whole quantity of beer in excess of the nominal contents for that target population of containers, as specified in paragraph 11.3.2. You should calculate the additional duty liability as follows: If you packed by meter or weight control and your target population comprised: 1,000 x 50 litre containers at 3.6% ABV, and 500 x 50 litre containers at 4.2% ABV and, at the end of the accounting period, your monitoring record shows that the average contents of each container was 50.7 litres, additional duty will be due on the quantity in excess of the nominal quantity, that is, 0.7 litres multiplied by the number of containers delivered to home-use from the target population during the accounting period.
11.3.4
When should the additional duty be paid?
Duty becomes payable at the end of the accounting period in which a container of beer is delivered to home-use. That is, when it passes the duty point. Where you have incurred an additional duty liability as a result of overfilling, the additional duty should be paid in the relevant accounting period when beer is supplied to home use from your registered premises or from registered premises or Excise warehouses owned or operated by your company. In the case of overfilled containers of beer supplied in duty suspension to third parties, you should record details of these deliveries separately in your records. The law requires that the person, holding the goods at the time of their delivery to homeuse, is liable for the duty, including that on the volume in excess of the declared quantity. However, if we are satisfied that the third party was unaware that the container had been overfilled and that the third party is entirely independent of you, we will not normally seek to recover the additional duty due. In deciding whether or not to pursue the additional duty we will take into account the following factors: the relationship between you and the third party contracts of supply, if appropriate the price paid for the goods, and any other information considered relevant.
If you fail to properly record and/or pay the additional duty due on excess volume that you have delivered to home-use, we will assess you for the additional duty due. If you cannot produce accurate records upon which the additional amount of duty can be readily established, including quantities delivered to home-use, we will use 'best judgement'.
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This system has been devised taking into account as far as possible existing trade practices so minimising your compliance costs. Any attempt to evade duty by underdeclaring the quantity on which duty is charged or by manipulating deliveries to evade duty, may lead to prosecution.
11.3.5
What about cask conditioned beer?
Duty need not be charged on any undrinkable sediment in your cask-conditioned beer, provided: your customer (for example, the publican) is made fully aware in writing, at or before the time of receipt, of the quantity of beer on which duty has been charged. If, for example, a barrel (163.7 litres) contains 2.3 litres of undrinkable sediment, the customer must be made aware, by a statement on the label, delivery note or price list etc., that duty has been charged on 161.4 litres (a copy of the notification to customers must be retained) you can, if required to do so, satisfy our officer that only undrinkable sediment has been excluded from the duty charge.
Any sediment on which duty has not been charged cannot be included in any subsequent claims for relief on spoilt beer.
11.3.6 How do I calculate the amount of undrinkable sediment?

There is no prescribed method. You must, however, be able to satisfy us that the method you use gives equitable results. Sediment levels for each quality of beer and container size must be regularly monitored by brewers and reviewed/amended (as necessary) at least annually and notified to us. Any changes to recipes/ingredients etc. during the year, which would significantly affect sediment levels, must be notified to us and the allowance adjusted accordingly.
11.3.7 Is there an undrinkable sediment allowance for polypins, mini-pins and bottle-conditioned beer?
There is no undrinkable sediment allowance for polypins and mini-pins sold by brewers to the public or on bottle-conditioned beer.
11.4
11.4.1
Small and Large Pack

How do I deal with imports?
International obligations require that we cannot treat imports any less favourably than domestic product. As importers will not necessarily be aware of the actual contents of containers, we will apply the same principle set out in paragraph 11.2.4.
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12. Alcoholic strength 12.1 What is alcoholic strength?
For duty purposes alcoholic strength is the percentage of alcohol by volume (ABV) in the beer. This should be expressed to one decimal place, for example, 4.19% ABV becomes 4.1% ABV. Ignore figures after the first decimal place.
12.2
How can I measure alcoholic strength?
You may use any method you wish to measure the strength of beer as long as it produces results that agree with those that would be achieved using the reference method described in section 29. If you do not have your own facilities for determining ABV by analysis and you do not add priming sugar, you may use the method (based upon the degrees of attenuation in the beer) which is reproduced at section 30. If you do add primings to your beers you may use the method which is reproduced at section 31. Additionally, for these or any other methods not based on laboratory analysis, an independent analyst must test the ABV of each of your products, at least annually, to confirm consistency with calculated results. The results of the independent analyses must be held in your business records.
12.3 What alcoholic strength is used for duty purposes?

For duty purposes, the alcoholic strength of brewery-conditioned beer is the greater of the actual strength or the label/invoice/delivery note strength of beer when it passes the duty point. For duty purposes, the alcoholic strength of cask or bottle conditioned beer or any other unfinished beer is the greater of the strength which the beer is reasonably expected to have when sold by way of retail or otherwise supplied for consumption or the label/invoice/delivery note strength of the beer. However, if you comply with certain conditions, we will accept for duty purposes the strength stated on the package label, invoice, delivery note or similar document (this is known as the declared strength).
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12.4 What are the conditions for using the declared strength?
If you wish to use the declared strength for duty purposes, you must be able to demonstrate that you have exercised due diligence in the control of your process to ensure that, on average, the actual ABV of each finished product equates to that which you are declaring on the label etc.
12.5 How can I demonstrate that due diligence has been exercised in the control of ABV?
You must continuously monitor and record your ABV results, which should normally fall randomly on either side of the target strength. The average of your results should equate closely with the target which must be the declared strength. It is recognized that ABV may occasionally vary, but provided appropriate action is taken quickly to return the strength of the beer to within its normal specification, due diligence will have been demonstrated. You must keep records of action taken to maintain product strength within control limits.
12.6 Do I have to measure the strength of each product?

You must establish the strength of each discrete batch for each of your products. Where beer from one batch is packaged into different container types, for example, cans and bottles, you may combine the results.
12.7 What about infrequent or one-off brews?

If you can demonstrate to us that based on available information and experience, due care was taken when deciding target ABVs for new and/or infrequently brewed products (and that all decisions, actions etc. were properly recorded), we will accept the label/invoice/delivery note strength for duty purposes.
12.8 How will the accuracy of this system be checked by HM Revenue & Customs?
Our officer will examine your results and your record of actions taken. Where the results have consistently fallen above your target, he will wish to confirm that action was taken as soon as the problem was identified to bring the process back into control or to change the declared ABV. If you have failed to take such action, an assessment will be raised for the additional duty due.
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12.9 Do I use the same arrangements for measuring strength of beer which may be delivered under duty suspension?
Yes, because it is likely that the beer will subsequently be delivered on payment of duty, the same arrangements must apply for all beer you produce. It is the responsibility of the person holding the beer at the duty point to account for the duty. Therefore, if you despatch packages in duty suspension on which the strength is understated on the label/invoice/delivery note, you must inform the consignee accordingly.
12.10 What happens if there is a dispute over the strength?

Our officer may take samples of beer which will be analysed using the reference method described in section 29. The analysis result will establish the actual dutiable strength of the beer for legal purposes.
12.11
Cask and bottle conditioned beer
12.11.1 What alcoholic strength is used for duty purposes on cask and bottle conditioned beer?
Cask and bottle conditioned beers will continue fermenting after removal from registered premises. This will result in an increase in strength. You must account for duty on the strength at which you expect the beer to be when it is consumed. This is also the strength which must be shown on the label/invoice/delivery note.
12.11.2 Are there any additional due diligence requirements in relation to cask and bottled conditioned beer?
Yes. In addition to the procedures laid out in paragraph 12.5 which establishes the ABV at packaging, you must regularly monitor and record the actual strength of each quality of cask and bottled conditioned beer at the expected time of consumption, to establish its alcoholic strength. The precise method and frequency of checking is a matter for you, but you must be able to satisfy us of the accuracy of your results.
13. Beer duty account 13.1 What is a beer duty account?
A beer duty account is a summary of the beer duty due in each accounting period.
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You must keep an account which contains the following information: the amount of duty due on all beer which leaves duty suspension see paragraph 7.3 the amount of duty reclaimed on spoilt beer which has been reprocessed or destroyed see section 20 the amount of duty reclaimed on drawback see paragraphs 23.4 and 24.6 the amount of any underdeclarations from previous periods see paragraph 15.9 the amount of any overdeclarations from previous periods see paragraph 15.9, and the net amount of duty due for the period and the date and method of payment.
You should keep the beer duty account in a specific book or ledger opening. An example of a beer duty account is shown in paragraph 13.3, but another form of account containing the same information may be acceptable.
13.2 Can I keep my duty account on computer?

Yes, providing that you are able to print a satisfactory legible copy of the account whenever we require you to do so.
13.3
Example of a beer duty account

124,571.20
Period from 1 June 2005 30 June 2005 Duty due on all beer released from duty suspension for consumption (Separate totals are required for each rate of duty). Underdeclarations from previous periods Overdeclarations from previous periods Net Duty Due Spoilt Beer (including any relief for reprocessed beer) Drawback 124,571.20 - 402.80 - 350.00
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Net amount of duty due for the month Paid on 25 July 2005 by Direct Debit
123,818.40
14. Records 14.1 General
As a revenue trader you need to keep and preserve certain records and accounts as evidence of your business activities (The Revenue Traders (Accounts and Records) Regulations 1992). If your records do not satisfy our requirements we may direct you to make the necessary changes. You have to give us access to all your business records.
14.2

What type of records must I keep?

production stock handling buying selling importation, and exportation of beer.
You have to keep a record of:
Records for importation and exportation should also include acquisitions from, and removals to, the EU. As a registered producer or packager of beer we also require you to keep a beer duty account (see section 13), a spoilt beer record (see section 20) and records of beer in duty suspension (see section 9). In order to demonstrate that you qualify for small brewery beer, you must keep a Beer Production Account as set down in paragraph 8.9. If you handle duty suspended small brewery beer, you must hold the documentation set out in paragraph 8.20.
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14.3
How long must I keep my records for?
You must normally keep your business records for six years. If, however, this causes problems, ask the Excise and Customs Helpline if you can keep some of your records for a shorter period. You must get our agreement before destroying any of your business records that are less than six years old.
14.4
Must I keep the original documents?
You can keep your records on any form of storage technology, provided that copies can be easily produced and that there are adequate facilities for allowing our officer to view them when required. Obtain agreement from the Excise and Customs Helpline before you transfer records. You may be required to operate the old and new systems side by side for a limited period of time. We may refuse or withdraw approval if any requirements are not met.
14.5 What if I keep my records on a computer?

You can also keep your records on a computer, for example, on magnetic tape, disc etc., provided they can be readily convertible into a satisfactory legible form and made available to us when required. If you do keep your records on a computer we require access to it so that we can check its operation and the information stored. We may ask for help from you or anyone else having charge of, or otherwise concerned with, the operation of the computer or its software. If a computer bureau is employed, you are responsible for arranging for the bureau to make your records available to us when we wish to see them. Normally this will be at your principal place of business. If, after you have been registered, you decide to use a computer or the services of a computer bureau for beer duty accounting, you should notify the Excise and Customs Helpline, phone 0845 010 9000. Where you intend to use your own computer, you should notify the Excise and Customs Helpline at the systems design stage or earlier.
15. Beer duty returns 15.1 What is a beer duty return?
A beer duty return (EX46) is the form on which you declare your liability for beer duty in each accounting period.
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15.2
How often must I make a return?
You must make a return of your beer duty liability each accounting period, which will normally be a calendar month. If your duty liability for the month is nil you must still send us a return.
15.3 What happens if I do not submit a beer duty return?

If you fail to submit a return on time you will be liable to penalties see paragraph 2.6. We have the authority to estimate the duty which would have been due and to pursue that debt through the civil courts see paragraph 16.7. If you foresee any problems, you should immediately contact the: HM Revenue & Customs Beer Duty Accounting Centre Queens Dock Liverpool L74 4AA Phone: 01236 783402
15.4
How do I obtain the return form?
EX46s are routinely sent out to all registered brewers and packers. If you fail to receive a return, you should contact the Beer Duty Accounting Centre.
15.5
How do I complete my return form?
You will find that each copy of form EX46 Beer Duty Return has full instructions on the completion of the return. A copy is reproduced at section 33. You must complete all boxes on the return writing 'none' where necessary. Returns must be completed in ink and any changes must be initialled and dated by the person who signs the declaration.
15.6
Who should sign the declaration?
The proprietor, a partner, the Company Secretary or a Director of the company should sign the declaration on the return. If this is not possible, you can authorise someone to sign the return on your behalf.
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15.7 Can a single duty return be submitted for multi-site operations?

Yes. If you have more than one registered premises owned by the same legal entity, you may, on request, combine the duty liability for each in the one duty return. However, an individual beer duty summary should be maintained for each site and consolidated in a beer duty account by the site submitting the return. Importantly you should note that if you submit a single duty return for more than one set of registered premises, you must still declare details of all despatches of beer sent out in duty suspension in box 2 of your return including duty suspended beer sent from one of your registered premises to another. Similarly, you must declare details of all receipts of beer received in duty suspension in box 3 of your return, including duty suspended beer received by one of your registered premises from another.
15.8
Accuracy of returns
You can avoid a penalty by checking that you have given complete and accurate information in your duty return. You may be liable to a penalty if your return is inaccurate and, as a result, you do not pay enough duty or if you do not notify us that a duty assessment we have sent you is too low. If you are aware you have made a mistake on your return, you must notify us as soon as possible. We may be able to reduce the penalty. If you deliberately make a false duty return, you may face prosecution for the offence and incur a heavy penalty. For further information on penalties, see link at paragraph 3.9. You have the right to appeal if we impose such a penalty. For further information on appeals, see section 34 and link at paragraph 3.9.
15.9 What if I discover errors relating to earlier accounting periods?

If you discover underdeclarations relating to previous accounting periods which total less than 1,000 duty, you must enter the amount in box 7 of your duty return for the current accounting period. Similarly, if you discover overdeclarations totalling less than 1,000 duty, you must enter the amount in box 8 of your return. You do not have to send a written advice, but details of the errors must be retained for inspection. If however, the total underdeclaration and/or total overdeclaration is 1,000 duty or more, you must, in addition to making the adjustments outlined above, send full details in writing to the Beer Duty Accounting Centre (see paragraph 15.3 for address) along with the return.
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15.10
When must I send in my return?
You must submit your return so that it arrives not later than the 15th day of the month following the accounting period. When the 15th day falls at a weekend or on a public holiday the return must be received by the previous working day.
15.11 Where must I send my completed return form?

All registered brewers and packers must send their returns to the Beer Duty Accounting Centre (see paragraph 15.3 for address).
15.12 Can I submit a return produced by my own computer?

If you keep your records on a computer and wish to make your beer duty return using a computer prepared form, you must contact the Beer Duty Accounting Centre (see paragraph 15.3 for address). Please note that the format of your return must conform to that of the official form EX46 Beer Duty Return.
16. Duty payment 16.1 How do I find out the rate of duty?
The Excise Helpline, phone 0845 010 9000 will advise you of the current rate on request, or you can find the rate on our website.
16.2
Budget changes
You are responsible for declaring the correct amount of duty from the effective date of change. When the duty rate changes, we will attempt to advise you of the new rate, the effective date and the time of the change. Following the budget, you can find details of the duty rate changes on our website or from the Excise and Customs Helpline. When the rate changes during an accounting period, you must complete separate EX46s for the period at the old and new rates, showing pre or post budget as appropriate.
16.3
Who is liable for the duty?
The person holding the beer at the duty point is liable for the duty. This may not necessarily be the owner of the beer.
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16.4
When must I pay the duty?
You must pay the duty shown on your monthly beer duty return no later than the 25th day of the following month. If the 25th falls on a Saturday, Sunday or public holiday, you must pay by the previous working day.
16.5 16.6
How do I make my duty payments? Payment by Direct debit
You will normally have to pay by direct debit.
You should complete a direct debit mandate which gives authority to your bank to pay the duty to HM Revenue & Customs. Once you are registered as a producer/packager of beer, the National Registration Unit will issue you with a mandate form so that the necessary arrangements can be made with your bank. Please return the completed form to the Beer Duty Accounting Centre (see paragraph 15.3 for address.) We will then issue you with a direct debit approval number which you must quote on your beer duty return. Once you have sent in your monthly beer duty return, no further action is needed and your bank account will be debited with the duty payable on the 25th of the month (or previous working day if the 25th falls on a Saturday, Sunday or public holiday). Any changes to your bank details, such as a new account number, must be notified to the Beer Duty Accounting Centre who will supply a fresh mandate for completion.
16.7
What happens if I do not pay the duty?
If you fail to pay the duty by the due date, you will be liable to a civil penalty of 5% of the duty or 250 - whichever is greater. In addition, further penalties may be incurred for each day that you fail to pay the duty. Details of civil penalties are contained in Notice 209 Civil Penalties: Fixed, geared and daily. If you fail to pay on time, we may direct you to pay duty as soon as a duty point occurs rather than allowing you to defer payment of duty liability until the 25th of the following month. At any time after the due date for payment, our officer may take action to take possession of all beer, materials and equipment used in brewing and packaging or connected with your trade as a brewer or packager, which are either owned by you or are in your possession and auction them to recover duty due plus pay distraint costs. See also paragraph 2.6 of this notice.
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17. Experimental brewing 17.1 Do I have to register for experimental brewing?

If you brew solely for the purposes of research or experiments in the production of beer, you do not need to register for beer duty purposes nor pay duty on the beer. However, you must still notify us, see paragraph 17.3. However, if you intend to sell or give away any of the beer you produce you must apply for registration and pay duty on such beer.
17.2 Is duty payable on beer brewed for experimental purposes by registered brewers?
No. Duty relief will be given on any beer brewed by a registered brewer which is to be used only for research or experiments in the production of beer. The relief from duty is subject to conditions.
17.3 Do I need to notify you of my intention to produce beer for experimental purposes?
Yes. If you are not a registered brewer you must, before you start the production of beer for research or experimental purposes, write to the National Registration Unit (for address, see paragraph 4.3) advising of: your name and the address at which you intend to produce beer your normal business or occupation the quantity of beer you expect to produce each month how you intend to dispose of the beer, and details of any other trade you have in goods liable to Excise duties.
As well as providing the information shown above, you must also observe the conditions shown in paragraph 17.5 and keep the records specified in paragraph 17.6, otherwise duty will be payable on the beer.
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17.4
Research and experiment
To qualify for relief, the beer must be brewed to test new brewing processes, equipment and ingredients. The relief can apply to trials by registered brewers who wish to test the suitability of new brewing methods or materials, and do not intend to sell the beer.
17.5 Disposal of beer produced by registered brewers

To qualify for relief from duty, you must not sell or give away any of the beer produced. You may conduct taste tests among your employees, but the beer must not be consumed in any other circumstances. Taste tests must not include prospective or actual customers. When the research or experiments are finished all the remaining beer must be destroyed.
17.6 What records must registered brewers' keep?

You must keep a record showing: the date of production the quantity and ABV of beer produced the date and method of destruction, and the quantity destroyed.
Records must be in a form acceptable to our officer and produced at any reasonable time. Records must be kept for at least six years, unless otherwise agreed with the Excise and Customs Helpline.
17.7
Can I sell the finished beer?
Only if you are a registered brewer. If so, any beer that you despatch for consumption becomes liable for duty in the normal way.
18. Mixing of beer 18.1 What does mixing mean?
The term mixing in this section means the mixing of beer from one brew with that from another and the mixing of beers of different alcoholic strengths.
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18.2 Are there restrictions on the mixing of beer?

Yes. Beer that is not in duty suspension may not be mixed with duty suspended beer. Beers of different strengths that have passed the duty point may not be mixed until they are sold by retail or otherwise supplied to the consumer. You may mix duty suspended beers only on registered premises or in an Excise warehouse. However, there are no restrictions on the mixing of beers of the same strength that have passed the duty point.
18.3 What records of mixing are registered persons required to keep?

Your own commercial records will be sufficient if they include the date of mixing and the quantity, type and alcoholic strengths of the beers you mix.
18.4
What if I am mixing small brewery beer?
You may mix small brewery beer with beer of a different rate of duty in duty suspension. However, the resultant mixture will not be small brewery beer and, therefore, not eligible for reduced rates of duty. The finished product will be liable to the standard rate of duty. You may not carry out any operation on small brewery beer which would result in the beer being subject to a different rate of duty than would otherwise have been the case.
19. Additions to beer 19.1

19.1.1
Priming
What is priming?
Adding sugar solution to beer to encourage secondary fermentation and increase its alcoholic content see paragraphs 12.2 and section 31.
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19.1.2
Where can beer be primed?
Beer can be primed on registered premises and on any other premises which we approve. If you are a registered brewer or registered holder and you wish to prime beer on premises which are not registered, you must seek our approval. When you obtain such approval you must keep a record on your registered premises of any such premises at which priming takes place. If you are not a registered brewer or registered holder you may not prime beer unless we have approved the arrangements.
19.1.3

How do I get approval of premises for priming?
Contact the Excise and Customs Helpline, phone 0845 010 9000, stating: the address of the premises at which you wish to undertake priming the addresses of registered premises from which the beer will be received the estimated annual quantities of the beer to be primed, and the destination of the primed beer.
19.1.4

What records should I keep?
Your records must include the following: the date and time of the priming the type of beer (product name) that is primed the quantity and strength of beer that is primed the type and quantity of primings added, and the quantity and expected strength of the resulting product.
These records should be kept on the premises where priming is carried out and made available to our officer when requested.
19.2
19.2.1
Dilution
Can water be added to beer?
Yes. Beer in duty suspension on registered premises can be diluted with water. If you wish to add water to beer elsewhere, before it is sold or supplied to the consumer, you must obtain our approval from the Excise and Customs Helpline, phone 0845 010 9000.
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19.2.2
Dilution of small brewery beer
If you add water to dilute small brewery beer after it has left registered premises in which it was produced, it will no longer be small brewery beer.
19.2.3
Your normal commercial records should be sufficient for our purposes if you dilute beer on registered premises after it has been produced see paragraph 7.2. But if we approve dilution elsewhere, we will expect your commercial records to contain the following information: the quantity and strength of beer before dilution the quantity of water added, and the quantity and strength of beer after dilution.
19.3
19.3.1
Finings
Where can finings be added?
You can add finings (provided they do not contain alcohol), to beer on any premises.
19.3.2
We do not require any record to be kept of the addition of finings to beer but, if you do keep records, we may wish to see them.
19.4
19.4.1
Other Additions
Are any other additions allowed?
Once beer has passed the duty point, no substance which causes or may cause an increase in the duty liability of the beer may be added to it until the beer is sold or supplied to the consumer, unless we have approved the addition of that substance. If you wish to mix beer with any such substance, including non-alcoholic beverages, after the duty point, you must seek prior approval from the Excise and Customs Helpline. However, if you only intend to produce drinks whose alcoholic strength is not more than 1.2% ABV, you do not need to seek our approval.
19.4.2 Beer mixed with spirits where the finished product exceeds 1.2%
Beer mixed with spirits will be liable to the spirits rate of duty. This applies even if the majority of the product is sourced from the beer rather than the spirits. There are only two instances where an element of spirit may be used in the manufacture of 'beer' products, without the finished product incurring the spirits rate. These are where:
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there are no spirits in the final product, for example, the spirits are used as a carrier for a flavouring which is added at an early stage of production and the actual spirits are burnt off during the course of production. Duty would be liable on the finished product which is the manufactured beer, or the spirits added to the product and which form a part of the finished product, are of such a token amount as to make them completely insignificant (that is, the spirits added to the beer are of such a small quantity, they do not lead to a recognizable increase in the alcoholic strength of the beer).
If you are unsure of the duty category (beer or spirits) that will apply to the product you intend to produce, you should consult the Excise and Customs Helpline, phone 0845 010 9000 before production begins.
19.4.3
Beer-based mixed drinks between 1.2% and 5.5%
When beer is mixed with alcoholic (other than spirits) or non-alcoholic beverages, the resulting product is classified as beer.
19.4.4 What beverages within these limits are deemed to be beer?

Shandy made with lemonade or a mixture of beer and lemonade, lemon cordial, lemon flavourings, lemon juice, or lemon squash. Lager and lime, or a mixture of beer and lime cordial, lime flavouring, lime juice, lime squash or limeade. Ginger beer shandy, shandygaff, or a mixture of beer and ginger, ginger cordial, ginger, ginger flavouring, ginger squash or unfermented ginger beer. A mixture of beer and fruit cordial, fruit flavourings, fruit flavoured carbonated water, fruit juice or fruit squash. A mixture of beer and any alcoholic liquor or alcoholic substance (other than spirits see paragraph 19.4.2).
19.4.5 Beer mixed with other liquors (other than spirits) or substances where the finished product exceeds 5.5%
Beer mixtures containing dutiable liquors are liable at the appropriate made-wine rate of duty. Beer mixed with non-alcoholic liquors and substances will also be liable at the appropriate made-wine rate of duty.
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If you are unsure of the duty category that will apply to any product you intend to produce, you should consult the Excise and Customs Helpline, phone 0845 010 9000 before production begins. They will also advise you of any additional approvals you may need (for example, made-wine producer's licence).
19.5
19.5.1
Alcoholic Carbonates
General
These products are sometimes referred to as flavoured alcoholic beverages, but are more commonly known as 'Alcopops'. They are not necessarily made using beer as an ingredient. If you intend to manufacture products of this type which contain beer, the advice in paragraphs 19.4.2 to 19.4.5 should be followed.
19.5.2 Can I produce alcoholic carbonates that do not contain beer?

Yes, but such products will be classified for duty purposes as either made-wine or spirits. Consequently, additional approvals and licences will be required. You should, therefore, consult the Excise and Customs Helpline before you commence production.
19.5.3 Can I package alcoholic carbonates that are not classified as beer?
Yes, but again additional approvals will be required and you should consult the Excise and Customs Helpline in advance.
20. Relief of duty on beer which has become spoilt or otherwise unfit for use 20.1

What beer is eligible for duty relief?

it has been charged with duty it has become spoilt or otherwise unfit for use unless delivered in bulk, it is presented for duty reclaim in the same container in which it left duty suspension. However, where not possible for Health and Safety or other practical reasons, the beer may be transferred to other containers subject to prior approval from HM Revenue & Customs.
Any beer which meets all the following conditions:
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20.2
Who may claim the relief?
Normally the registered brewer or registered holder who accounted for the duty is the person who may claim relief. Relief cannot be claimed until reprocessing has commenced. If either the producer of the beer or the brewer reprocessing the beer did not account for the duty but wishes to claim relief, our prior approval to the arrangements must be sought. If a registered brewer purchases duty paid beer which becomes spoilt and he wishes to destroy the beer and claim spoilt beer relief, he must apply to us for approval to do so. In the case of beer which was imported on payment of duty, only the person who accounted for the duty on importation will normally be entitled to claim relief, but the Excise and Customs Helpline will be able to provide further information in these circumstances. In the case of multi-site brewers or packagers, provided the registered premises are operated by the same registered person, claims on behalf of the group may be made and offset on one duty return.
20.3 Do I have to destroy the spoilt beer to claim duty relief?

No, the spoilt beer may be either destroyed or reprocessed.
20.4

What does reprocessing mean?

beer which is to be mixed with other beer on registered premises, and beer which is to be filtered or repasteurised.
The relief from duty for reprocessing includes the following operations:
20.5
What must I do if I want to claim relief?
You must keep a spoilt beer record containing the particulars shown in paragraph 20.20.
20.6
On what quantity do I claim relief?
You can only claim for the actual quantity of beer destroyed or reprocessed on which duty has been charged. This will depend on whether you: use a spoilt beer vessel
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destroy directly from cask, keg or other package, or a combination of both.
If you wish to decant beer to determine the volume for relief, you must use a gauged and tabulated spoilt beer vessel or establish the volume by using a properly calibrated meter. If you destroy or decant for reprocessing directly from cask, keg or other containers, you can only claim for the actual quantity of beer returned on which duty has been charged. In the case of un-broached containers, you should use the declared contents. Broached containers and depot leakers, which may be un-broached, should have their actual contents measured for duty reclaim purposes. (Note - remember to exclude any undrinkable sediment allowance from the quantity claimed.)
20.7 On what strength should I base my claim?

Your claim must be based on the strength on which duty was charged. If you destroy directly from cask, keg or other containers, your claim must be based on the strength on which duty was charged. Where you use a spoilt beer vessel to claim relief, you must take a representative sample of the beer for laboratory testing to establish the strength. This must be recorded in support of your claim.
20.8
How do I make a claim?
At the end of the accounting period, total the entries in the spoilt beer record (including those in respect of destructions and reprocessings of spoilt beer) and transfer the total to your beer duty account. To claim relief, enter this total (that is, the spoilt beer relief claimed) in box 12 of your beer duty return.
20.9

Is any spoilt beer excluded?

unconsumable beer (for example, sediment in cask conditioned beer) on which duty was not charged is ineligible for relief diluted beer is ineligible (unless we approved the addition of water) adulterated beer (that is, beer containing additions which we have not approved) is ineligible, and
The following are excluded:
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where no satisfactory audit trail is available.
Note if any beer becomes spoilt more than three years after the duty was paid on that beer, you cannot claim relief.
20.10
How do I identify ineligible beer?
You should satisfy yourself that the beer returned is the same beer which was in the container at the time it left duty suspension. The contents of any containers suspected of containing diluted or adulterated beer, should be rejected as ineligible or subjected to laboratory testing.
20.11 What percentage of containers should I sample for laboratory testing?

If you take samples from all containers for laboratory sampling, you will be able to identify and exclude all ineligible beer from spoilt beer claims. If you do not sample 100% for laboratory testing, you should establish a sampling plan which should be set out in a formal written procedure. If you decide that a random sampling rate of 10% is appropriate and 5% of the containers tested are found to contain ineligible beers, then the total duty element of the claim should be reduced by 5%.
20.12
When can I destroy spoilt beer?
Subject to any notice of destruction being required (see paragraphs 20.14 and 20.15), you may destroy spoilt beer at a time of your own choosing. However, entitlement to reclaim duty on spoilt beer will depend on the conditions below being met. The following conditions have the force of law and are made under regulation 26(2) of the Beer Regulations 1993. a full audit trail is maintained requirements of other regulatory authorities are observed (for example, environmental), and proper control practices are maintained, including appropriate action at management and supervisory levels.
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20.13 Additional conditions for reclaiming duty on beer destroyed away from registered premises?
The following conditions have the force of law and are made under regulation 26(2) of the Beer Regulations 1993. (a) Destructions in pub cellar: there must be a complete audit trail which confirms the beer has been destroyed and that it was duty paid, and the destruction of the beer must be supervised by a responsible representative of the brewery, for example, an Authorised Company Representative ACR. The ACR must be appointed by the brewery as an ACR in their records and be trained in that brewerys requirements. This condition also applies to an ACR who supervises destructions for more than one brewery. Note the requirements of other regulatory authorities must be observed. (b) Destructions at specialist destruction sites: there must be a complete audit trail which confirms the beer has been destroyed and that it was duty paid, the destruction of the beer must be supervised by either: an ACR of the brewery, or a person within the specialist destruction company who has been appointed by the brewery 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. (c) Spoilt beer 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).
20.14
Do I have to give notice of destruction?
Our officer will advise you if you need to give notice (see paragraph 20.15), otherwise you can destroy the beer whenever you wish.
20.15 What notice of destruction must I give?

If notice is required, you must give us at least: two working days notice if you wish to destroy beer in your registered premises, or five working days notice if you wish to destroy beer outside your registered premises.
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You must give details of the proposed method of destruction. Working days excludes Saturdays, Sundays and public holidays.
20.16
How must I destroy spoilt beer?
You must destroy the beer in a way acceptable to us and which makes it unsaleable as a beverage.
20.17
How do I make a claim?
At the end of the accounting period total the entries in your spoilt beer record (see paragraph 20.20) and transfer the total to your beer account. To claim relief, transfer this total (that is, the spoilt beer relief claimed) to box 12 of your beer duty return.
20.18
Budget changes
When the duty rate changes, separate entries must normally be made in the spoilt beer record for beer charged with duty at the old and new rates. However, we do not object to bulking of beer at two rates in one destruction, so long as a system to apportion the total has been agreed in advance with our officer. In these circumstances, only one entry on the spoilt beer record is necessary for the destruction.
20.19
How long must I keep my records?
Normally you must keep your records for six years from the date that the relief is claimed. However, if you wish to destroy them earlier please ask the Excise and Customs Helpline, phone 0845 010 9000 for our approval.
20.20
Particulars of the spoilt beer record
When beer is either returned to the brewery for destruction or reprocessing or destroyed remotely, you must enter the following particulars in the destruction or reprocessing sections of your spoilt beer record: the total volume of spoilt beer destroyed or beer reprocessed the strength of the spoilt beer destroyed or beer reprocessed the date and time of the destruction or when beer was returned for reprocessing, and the place and method of destruction.
The above requirements are provided for under regulation 30(1) of the Beer Regulations 1993.
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evidence that the duty has been charged or paid, and evidence of the amount of duty charged or paid.
The above requirements are provided for under regulation 33(1)(b) of the Beer Regulations 1993. In addition, the following requirements have the force of law and are made under regulation 33(1)(a) of the Beer Regulations 1993. the volume and strength of the beer in each container from which the spoilt beer was directly destroyed or in which the beer was returned for processing the description of the beer returned by each purchaser in respect of which a claim is made the name and address of each purchaser, and the numbers and sizes of each container in which the beer was returned by each purchaser returning the beer. Unless we allow a longer period, your spoilt beer record must be completed within one hour of reprocessing taking place. When kegs are returned to the brewery and residues removed for destruction, if you wish to reclaim previously paid duty, you must enter the following particulars in the destruction section of your spoilt beer record: the total volume of keg residue destroyed the strength of the keg residue destroyed the date and time of the destruction, evidence that the duty has been charged or paid, and evidence of the amount of duty charged or paid.
Residues from returned kegs must be decanted into a separate vessel and accurately measured to determine the quantity for relief. Residues from kegs returned from export do not qualify for this relief. Residues are not considered to be spoilt beer and, as such, they do not meet the provisions for spoilt beer relief under the Beer Regulations 1993. However, as a concession and for administrative purposes, residues can be entered in the spoilt beer record and duty can be claimed, along with duty on spoilt beer, on the beer duty return. Alternatively and subject to certain conditions, provision is also available for reclaiming duty on keg residues under the Excise Goods (Drawback) Regulations 1995. At the end of the accounting period, total the entries in the spoilt beer record of all destroyed and reprocessed beer and transfer the total to your beer duty account for claiming relief in box 12 of your beer duty return.
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21. Return of duty paid beer to duty suspension and co-storage of duty paid and duty suspended beer 21.1 Can I return duty paid beer to duty suspension?
No. Unless duty paid beer is spoilt and comes back for reprocessing it cannot be returned to duty suspension. For more information, see paragraph 20.4.
21.2 What happens if duty paid beer is returned to registered premises because of a failed delivery?
If duty paid beer is returned to your registered premises because a customer is unwilling/unable to accept a delivery or an erroneous delivery has been made, the beer must be separately identified from duty suspended stock in your records, for example, in a failed delivery account.
21.3 Can I store duty paid beer and duty suspended beer in my registered premises?
Beer on which any duty due has been paid can, subject to certain conditions, be costored with duty suspended beer in your registered premises. Beer could either be received duty paid or have duty paid on them while held in your registered premises. No physical segregation of duty suspended and duty paid beer is necessary. The change of status of any beer from duty suspended to duty paid must be recorded and the product(s) clearly identified in your records. Note Duty paid beer cannot revert to duty suspended status and duty suspended beer cannot be shown as duty paid without prior payment of duty.
22. Removal of alcohol from beer 22.1 What if I want to remove alcohol from beer?
If you wish to remove alcohol from beer you must apply to the Excise and Customs Helpline, phone 0845 010 9000 well before you intend to start the process. The alcohol produced from de-alcoholisation processes or extracted from yeast (other than that produced by traditional yeast pressing) is classified as spirits.
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22.2 How may I deal with the extracted alcohol?

The extracted alcohol may be: destroyed delivered for vinegarisation, or used to produce other alcoholic drinks.
If you intend only to destroy or deliver it for vinegarisation and you currently hold a Commissioner's Direction allowing you to extract alcohol from beer, you need take no further action. If you do not hold a Commissioner's Direction or you intend to reprocess the alcohol, see paragraph 22.3.
22.3 What requirements are there if I want to reprocess the extracted alcohol?
As the alcohol you have extracted is classified as spirits, you must: be licensed as a distiller hold a distiller's warehouse approval, and comply with the appropriate requirements of the Spirits Regulations 1991.
When alcohol extracted from beer (for example, waste or surplus beer) is reintroduced to beer products (where the spirits form a replacement source of alcoholic strength), the resulting product is classified as spirits and will be liable to the spirits rate of duty, unless treatment of such a mixture is as described in the two instances in paragraph 19.4.2. You will also require a compounder's licence to manufacture such mixtures. If you wish to produce other alcoholic drinks using the extracted alcohol, you may need to obtain additional approvals. You will need to contact the Excise and Customs Helpline, phone 0845 010 9000 who will advise you accordingly.
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23. Removals of beer from registered premises to other Member States 23.1 What beer may I remove to other Member States?
You may remove duty suspended beer or duty paid beer to other Member States.
23.2
Are the procedures different?
Yes, the procedures and requirements are totally different.
23.3 What procedures must I follow to remove duty suspended beer to other Member States?
You must follow the detailed procedures set out in Notice 197 Excise goods: Receipt into and Removal from an excise warehouse of excise goods and these include the following requirements: you must have financial security (guarantee) in place, the minimum level of security for movements is 20,000 you must ensure that you are sending the beer to a warehouse which the Fiscal Authorities have approved to receive that type of beer you must use specific documentation, and you must receive a valid certificate of receipt confirming that the consignee received the beer.
23.4 What procedures must I follow to despatch duty paid beer to the EU?
In order to reclaim the duty, you must observe the conditions of the drawback system which are contained in Notice 207 Excise duty: drawback. Registered brewers and packagers should offset the amount of drawback claimed during the accounting period by completing Box 13 on their duty return (EX46). The claim should be for completed movements only and supported by the necessary documentary evidence as required by Notice 207 Excise duty: Drawback. Drawback is a relief which provides for the repayment of Excise duty paid goods that have not and will not be consumed in the UK.
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23.5 May I send duty suspended beer to a non-registered trader?

Yes, but before you send the beer you must ensure that the consignee has paid or secured the destination member state's duty on the goods. You must hold original evidence before you despatch the beer and you must ensure that the evidence of payment travels with the consignment.
23.6 Notification of cash transactions

As a registered brewer/packager, you are required to notify us if you have been paid, or expect to be paid, in cash for the supply of duty suspended beer exceeding 9,000 (or equivalent in other currencies). You must complete form W7 Notification of cash payments for alcohol goods or alcohol related services in duty suspension which can be found on our website or the Excise and Customs Helpline, phone 0845 010 9000. For information on completion of the W7, please refer to the explanatory notes on the reverse of the form. You must send the completed form by fax or email to the: National Warrant Processing Unit Fax: 0131 469 7321 Email: Warrant Processing Unit If you are paid, or expect to be paid, in two or more instalments, which individually are below the 9,000 notification threshold but in total will exceed this amount, you must also notify us on form W7 when the first cash payment is received. Provided you have notified the transaction to us, you do not need to wait for us to respond to receipt of the W7 before removing duty suspended beer to other Member States.
24. Exports of beer to non-EU countries 24.1 What procedures must I follow to export duty suspended beer to non-EU countries?
You must follow the procedures set out in Notice 502 A brief guide to export procedures.
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24.2
What Customs declaration do I use?
You must complete an export declaration using form C88 Single administrative document (SAD). Information and guidance on completion of the SAD is contained in the Tariff, Volume 3, parts 1 and 2.
24.3
What evidence of export must I obtain?
We expect you to produce commercial evidence of exportation for any beer you have removed from your registered premises for export in duty suspension to non-EU countries. We do not provide official certificates of shipment. You may be liable for duty if you cannot produce evidence that the beer has left the EU. Detailed guidance on accepted forms of evidence of export is in Notice 703 Exports and removals of goods from the UK.
24.4 What documents must I complete for goods transiting the EU prior to export?
Guidance on the documents to be completed is in Notice 197 Excise Goods: Receipt into and removal from an excise warehouse of excise goods.
24.5 May I export duty paid beer to non-EU countries?

Yes, but in order to reclaim the duty you must observe the conditions of the drawback system which are contained in Notice 207 Excise duty: drawback. Registered brewers and packagers should offset the amount of drawback claimed during the accounting period by completing Box 13 on their duty return (EX46). The claim should be for completed movements only and supported by the necessary documentary evidence as required by Notice 207 Excise duty: drawback. Drawback is a relief which provides for the repayment of Excise duty paid goods that have not and will not be consumed in the UK.
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25. Supplies to diplomats and visiting forces within the UK and to entitled organisations in other Member States 25.1 Supplying duty suspended beer to diplomats and visiting forces within the UK
You must have an official authorisation for the delivery of the beer. You must complete specific documentation for the removal of beer from your premises. You will find more information in Notice 431 Visiting forces and Notice 197 Excise goods: Receipt into and Removal from an excise warehouse of excise goods.
25.2 Supplying duty suspended beer to entitled organisations in other Member States
You must obtain an order together with an exemption certificate when supplying beer in duty suspension to entitled international organisations, embassies and forces located elsewhere in the EU. You must complete specific documentation for the removal of beer from your premises. You will find more information on this and the procedures to follow in Notice 197 Excise goods: Receipt into and Removal from an excise warehouse of excise goods.
26. Removal of goods to HM ships and as ship stores 26.1 Removing duty suspended beer to HM Ships
You may remove duty suspended beer from your premises to orders from HM Ships. Treat as exports, the point of exportation being the delivery of the beer to the ship. You must complete commercial documentation for the removal of beer from your premises. You will find more information on this and the procedures to follow in Notice 197 Excise goods: Receipt into and Removal from an excise warehouse of excise goods.
26.2 Removing duty suspended beer as ships stores

You may remove duty suspended beer from your premises to be stores on an 'entitled' vessel, that is, a vessel with authority from us to receive duty suspended beer. Treat the beer as exports and complete commercial documentation for the removal of beer from your premises.
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You must put the following information on the document: your reference number your name and address the date of despatch from your premises shipper's own reference/order number the name and destination of the vessel a description of the beer including its quantity, strength and package size, and a statement indicating that it is being moved in duty suspension.
You must satisfy us that the beer has been shipped as stores. You will find more information on this and the procedures to follow in Notice 197 Excise goods: Receipt into and Removal from an excise warehouse of excise goods.
27. Imports
In this section the term 'import' should be read as 'acquisition' where beer is received from another Member State.
27.1
Is duty payable on imported beer?
Yes. The rate of Excise duty on imported beer is the same as that on UK produced beer. Beer produced by small breweries in other Member States or in third countries and imported into the UK, which meets the requirement of the UK scheme, is small brewery beer and eligible for the reduced rates see paragraphs 8.22 and 8.23. The duty is based on: the quantity imported the strength (ABV), and the previous calendar year's production volume of the producing brewery.
27.2 What are the procedures at importation?

This notice does not attempt to explain all the procedures for imports of beer. The main questions are answered below. A summary, in the form of a table, of import procedures is at paragraph 27.14. The table details each type of importation and indicates what documents are required and where further information can be found.
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27.3 May I import beer under duty suspension?

Yes. Payment of duty may be suspended in the following circumstances: if you are a registered brewer or packager importing the beer directly into your registered premises, providing they are registered to receive beers of the relative class or description, or the imported beer is delivered directly to an Excise warehouse approved for the receipt of beer.
27.4 When does duty become due on beer imported under duty suspension?
If you are a registered brewer or packager and you import beer which is delivered directly to your registered premises, you will not have to account for the duty until such time as the beer ceases to qualify for duty suspension see section 9.
27.5 How can I import beer in duty suspension from other EU Member States?
As a registered brewer or packager, your registered premises will be a tax warehouse and you can receive beer, duty suspended. From 1 April 2010 some movements will be via EMCS and some movements will still be on AAD's. From 1 January 2011 all these movements will be via EMCS. This procedure is explained fully in Notice 197 which is available online. The details of the consignment must then be entered into your records for the receipt of beer under duty suspension - see section 9.
27.6 How do I receipt received goods?

Receipting requirements: EMCS - a receipt must be produced within 5 days AAD's - a receipt must be provided by the 15th day of the following month, up until 31 December 2010
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27.7 What are the procedures for duty suspended importations from countries outside the EU?
Any Customs duty must be paid at importation (unless consigned to a warehouse approved to receive both HM Revenue & Customs goods). There is no requirement to provide a receipt to the consignor, but you should retain your supplier's invoices and a copy of the Import Declaration which was known as a C88 Single administrative document (SAD) - see section 24. Details of each consignment must be entered in your records for the receipt of beer under duty suspension see section 9.
27.8 What happens if I don't qualify for Excise duty suspension?

This depends on the country of consignment. If the beer comes from another EC Member State, then duty must be accounted for immediately. Further information on these procedures may be obtained from Notice 203A Registered Consignees which can be accessed via our website.
27.9 How do I receive beer that has been duty paid in another EU Member State?
When receiving beer that has been duty paid in another Member State, you must use the appropriate UK duty paid movement scheme. You must notify HMRC of the movement and secure or pay the UK duty before the goods are dispatched. Full details are available in Notice 204A 'Commercial Importers and Tax Representatives - EU trade in duty-paid Excise goods'.
27.10
What about Excise Warehouses?
Beer may be deposited in an Excise warehouse on importation, provided that the warehouse is authorised to receive packaged or bulk beer as appropriate. You will be able to check this through the Excise and Customs Helpline, phone 0845 010 9000 who has access to the community wide list of authorised tax warehouses. Further information on warehousing is contained in Notice 197 Excise goods: Receipt into and Removal from an excise warehouse of excise goods.
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27.11
May I import beer concentrate?
If you wish to import beer which has been subject to a concentration process, you should establish duty liability before importation. The concentration process is often distillation which could mean that the concentrate will be classed as spirits for duty purposes, liable at a higher rate than beer. If you intend to import beer concentrate you should inform the Excise and Customs Helpline, phone 0845 010 9000 before you start.
27.12 What specific information will be required on import documents?

In addition to the general information required on the various import documents, the following specific detail is needed in respect of beer: the total volume actually imported in litres the alcohol by volume expressed as a percentage to 0.1% (for example, 4.2%), and if the beer meets the requirements of the UK reduced rates scheme, a certificate of the previous year's production of the producing brewer see paragraphs 8.22 and 8.23.
27.13
What if I do not know the ABV?
It is your responsibility to ensure that a full and accurate declaration is made. If you do not know the ABV of the beer, either: ask the supplier for it and request that it is, in future, provided on the container(s) or accompanying invoices, or request our permission for you to sample the beer for analysis in advance of the full declaration.
In the latter case, you should write to our officer at the place of importation advising: your full name and address the location of the beer to be sampled, and all other details needed to identify the beer.
You should be aware that if you under-declare the ABV of the imported beer, you will have to pay any additional Excise duty. Additionally, you may be prosecuted for any false declaration and the beer may be liable to forfeiture.
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27.14 Can beer be cleared in advance of sample results?

Yes, but only if you: pay a deposit to cover any additional duty based on the declared ABV, plus 0.5%, and agree in writing to pay any additional duty due if the sample result reveals a higher ABV.
27.15 Will HM Revenue & Customs want to take samples?

Our officer may wish to examine and sample the beer. It is your responsibility to provide all the facilities necessary to examine packages and containers. This is particularly important with beer under pressure in kegs or bulk containers.
27.16
Import procedures
(a) Imports by registered brewers and packagers From EU countries: N.B. Some EU countries will start using EMCS from 1 April 2010 and all EU countries will be using EMCS to dispatch beer from 1 January 2011. Contingency to registered premises Documentation Administrative Accompanying Document (AAD) AAD AAD Further Information Notice 197 Excise goods: Receipt into and Removal from an Excise warehouse of Excise goods. Notice 197 Notice 203A Registered Consignees
to an Excise warehouse to non-registered premises From non-EU countries: Contingency to registered premises to an Excise warehouse (approved to receive
Documentation SAD Form C88 SAD Form C88
Further Information See paragraph 27.6 of this notice Notice 197
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Customs goods) to non-registered premises SAD Form C88 Customs Tariff
(b) Imports by non-registered persons From EU Countries: Contingency to Excise warehouses to non-registered premises From non-EU countries: Contingency to Excise warehouses (approved to receive Customs goods) to non-registered premises Documentation SAD Form C88 Further Information Notice 197 Documentation AAD AAD Further Information Notice 197 Notice 203A
SAD Form C88
Customs Tariff
(c) Imports by occasional importers From EU Countries: Contingency Note Occasional importers may not receive Excise goods duty suspended from suppliers based in non-EU countries. Documentation A declaration prior to importation on C&E 1165 Further Information Notice 204A Temporary Registered Consignees
28. Accounting for Value Added Tax 28.1 VAT? Where can I find information about
The following paragraphs give a brief summary of the treatment of beer entered into, supplied within and removed from registered premises/Excise warehouses. Further information can be obtained from the Excise and Customs Helpline, phone 0845 010 9000. General information on VAT can be found in Notice 700 The VAT Guide.
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28.2 Beer I produce and supply duty paid to customers

If you produce beer in duty suspense in your registered premises and you supply it duty paid to customers, you must account for VAT as output tax on your VAT return.
28.3
What value for VAT must I use?
The value for VAT is the duty inclusive price you charge your customer.
28.4 Beer I supply in duty suspension to other registered premises or Excise warehouses
Any supply of UK produced beer within the warehousing regime (that is, supplies of beer in duty suspension from one registered premises to another or from registered premises to an Excise warehouse approved to receive beer) is disregarded for VAT purposes under the VAT Act 1994, Sections 18(2) and (3).
28.5 Beer I receive in duty suspension from other registered premises or Excise warehouses
If you receive beer in duty suspension from other registered premises/Excise warehouses and you supply the beer duty paid to customers, you must account for VAT on both the purchase and supply of the beer. VAT becomes due only when beer is removed from registered premises/Excise warehouses to home use and is normally payable together with any suspended duty by the person who removed the goods. This means that the last holder of the beer in duty suspension, who is not necessarily the owner, accounts for and pays (or defers) the VAT on the beer together with the Excise duty when the goods are removed to home use.
28.6
How do I account for VAT?
You account for VAT on the purchase of the beer on form EX46 (VAT) - VAT due on alcoholic beverages supplied under VAT Act section 18 and for the sale of the beer on form VAT100 VAT Return.
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28.7 When do I account for the VAT on the purchase of the beer?
You account for the VAT at the end of the period in which you remove the goods from your registered premises.
28.8 What is the value for VAT of these purchases?

The value for VAT is the cost of the beer to you plus the duty.
28.9
How do I reclaim the purchase VAT?
You should reclaim the purchase VAT as input tax on form VAT 100 VAT Return.
28.10 What evidence do I need to reclaim the purchase VAT?

If you are the owner of the goods you will be issued with a VAT certificate (C79) during the month after payment of the VAT on the EX46 (VAT). The C79 is the official evidence you need to claim VAT paid on warehouse removals as input tax. If you are not the owner but the goods were removed to home use from your registered premises, you should recover the EX46 (VAT) paid by you from the owner of the goods by disbursement invoice.
28.11 Beer I receive in duty suspension from EU suppliers

If you receive beer in duty suspension at your registered premises from a EU supplier and you supply the beer duty paid to customers, you must account for VAT on both the purchase and supply of the beer. The VAT on the purchase is called acquisition VAT.
28.12 28.13
How do I account for the VAT? When do I account for VAT?
You account for acquisition VAT and supply VAT on form VAT 100 VAT Return.
You account for the VAT at the end of the period in which you remove goods from your registered premises.
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28.14
How do I reclaim the acquisition VAT?
You may reclaim the acquisition VAT as input tax on the same return.
28.15 Non-community beer received in duty suspension

If you receive non-community beer in duty suspension at your registered premises and you supply the beer duty paid to customers, you must account for VAT on both the purchase and supply of the beer. The VAT on the purchase is called import VAT.
28.16
How do I account for this VAT?
You account for VAT on the purchase of the beer on form EX46 (VAT) - VAT due on alcoholic beverages supplied under VAT Act section 18 and for the sale of the beer on form VAT100 VAT Return.
28.17
When do I account for VAT?
You account for the VAT at the end of the period in which you remove the goods from your registered premises.
28.18 28.19
.
How do I reclaim import VAT? How do I obtain the EX46 (VAT) form?
You should follow the procedures outlined in paragraphs 28.9 and 28.10.
You should contact the Excise and Customs Helpline, phone 0845 010 9000.
28.20
How do I complete my form?
You will find that the EX46 (VAT) - VAT due on alcoholic beverages supplied under VAT Act section 18 has instructions on the completion of the form.
28.21
Where must I send my completed form?
This form should be sent together with form EX46 Beer Duty Return to the Beer Duty Accounting Centre (see paragraph 15.3 for address).
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28.22 Are the VAT rules the same for duty suspended beer I receive for processing?
Not necessarily. Some services or processes applied to existing beer can change its nature to the extent that a new product is considered to be created. The new product is then treated as having been produced on your registered premises and any VAT that would have been due on the import, acquisition or supply before processing, is extinguished. Further information can be obtained from the Excise and Customs Helpline, phone 0845 010 9000.
29. Distillation analysis

(Referred to in section 12) Distillation analysis: Method of determining the strength of beer The procedure for distillation analysis is described in Schedule 4, The Beer Regulations 1993 which is reproduced below: Method of determining the strength of beer 1. (1) Subject to sub-paragraph (2) below, the strength of beer shall be determined in the following manner: (a) a representative sample is to be taken and, after first being cleared of sediment and gas by filtration in an approved manner, a definite quantity thereof by measure at the temperature of 20 degrees Celsius shall be distilled (b) the distillate shall be made up at the temperature of 20 degrees Celsius with distilled water to the original measure of the quantity before distillation (c) the strength of the distillate made up in accordance with paragraph (b) above shall be ascertained by determining its density in air at the temperature of 20 degrees Celsius by means of an approved pycnometer used in an approved manner, and (d) the strength of beer shall be taken to be the percentage of alcohol by volume in the table entitled Laboratory Alcohol Table which corresponds to the density determined in accordance with paragraph (c) above except that where the density so determined is between two consecutive numbers in the table aforesaid the strength shall be determined by linear interpolation. (2) Where the result ascertained by the method specified in sub-paragraph (1) above is rendered inaccurate by the presence of substances other than alcohol that method shall be adjusted in such manner as may be approved for the purpose of producing an accurate result. 2.
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In this Schedule: (a) approved means approved by the Commissioners, and (b) Laboratory Alcohol Table means a table of which a copy, signed by the Chairman of the Commissioners and identifying it as relating to the Spirits Regulations 1991, has been deposited in the office of the Queens Remembrance at the Royal Courts of Justice.
30. Calculation of Alcoholic Strength

(Referred to in section 12)
30.1 If you have no or minimal laboratory facilities

If you have no or minimal laboratory facilities, you may calculate the alcoholic strength of your beer by multiplying the number of degrees by which the beer has attenuated by a factor. In order to ensure that your calculations are accurate, it is essential that the OG be established as soon as possible after collection and before fermentation commences, which will normally be within one hour of completion of filling the fermenting vessel. Note If you add priming sugar to promote secondary fermentation you will need to calculate the alcoholic strength of the finished product as outlined in section 31.
30.2
Step 1. 2. 3. 4.
Calculating the alcoholic strength

Action Measure the original gravity (OG) within one hour of collection* Wait until fermentation is completed for cask-conditioned beer this will be after secondary fermentation in the casks, then Measure the present gravity (PG - also known as the specific or final gravity)* When you have taken your readings, calculate the alcoholic strength using the formula: (OG PG) x f = a% ABV Where: OG is the original gravity of the beer PG is the present gravity of the beer a is the beer's alcoholic strength, and
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f is the factor connecting the change in gravity to alcoholic strength. The value of 'f' is not constant because the yield of alcohol is not constant for all fermentations. In lower strength beers, more of the 'sugars' available for fermentation are consumed in yeast reproduction than in producing alcohol. The table at 30.3, produced by the Laboratory of the Government Chemist, shows the changing value of f depending on the alcoholic strength of the beer. *Use a suitably calibrated saccharometer adjusted for the temperature of the representative sample.
30.3 Value of factor 'f' for various alcoholic strengths

(OG - PG) Up to 6.9 7.0 10.4 10.5 17.2 17.3 26.1 26.2 36.0 36.1 46.5 46.6 57.1 57.2 67.9 68.0 78.8 78.9 89.7 89.8 100.7 % ABV Up to 0.8 0.8 1.3 1.3 2.1 2.2 3.3 3.3 4.6 4.6 6.0 6.0 7.5 7.5 9.0 9.0 10.5 10.5 12.0 12.0 13.6 Factor 0.125 0.126 0.127 0.128 0.129 0.130 0.131 0.132 0.133 0.134 0.135
The table indicates that for the majority of popular UK beers, the factor for calculating the estimated strength would lie in the range 0.129 and 0.130. For strong beers (exceeding 6% ABV), the factor would be in the range of 0.131 0.133. Whilst it is important that the correct value for 'f' is used, you should be aware that this table is primarily for your guidance. Some brewing methods and materials can affect the factor. If in any doubt you should seek further advice see below. As with other methods of calculating alcoholic strength confirmatory testing by an independent analyst or the HM Revenue & Customs approved analyst should be done at least annually, or whenever you change the specification of a product, so that the accuracy of gravity readings can be confirmed.
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31. Calculation of ABV when priming sugar is added to beer

(Referred to in section 12) If you add priming sugar at the maturation stage to promote a secondary fermentation and use the calculation method to ascertain the ABV of the finished beer, you will need to make calculations based on the steps outlined below. A barrel contains 163.6 litres which comprises 161.6 litres of beer which had an OG of 1040 and 2 litres of added priming sugar with an OG of 1110. The final gravity of the mixture after secondary fermentation is 1010. Step 1. Action Calculate the ABV of the fermented beer using the formula: (OG PG) x f = a% ABV where: OG is the original gravity of the beer PG is the present gravity of the beer (that is, final gravity after all fermentation has ceased) a is the alcoholic strength, and f is the factor connecting the change of gravity to alcoholic strength(1040 1010) x 0.129 = 3.8 Calculate the ABV of the priming sugar using the same formula: (1110 1010) x 0.135 = 13.5 3. Calculate the ABV of the contents of the container using the formula: (Vb x Sb) + (Vp x Sp) = Sm Vm Where: Vb = volume of beer in the container Sb = ABV of the beer in the container Vp = volume of primings in the container Sp = ABV of primings in the container Sm = ABV of the container contents, and Vm = volume of container contents.
2.
(161.6 x 3.8) + (2.0 x 13.5) = 3.9 63.6
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32. Registration application form

(Referred to in sections 4 and 5) Application for registration 1. Name of Applicant.. 2. Applicants address.... 3. Trading name......... .................. 4. Address of premises to be registered........................................ ....................... Phone number.................... 5. Status (Sole proprietor/partnership/limited company, etc.) ............................................................................................................................... Date of birth and home address of sole proprietor ... ... . Name, date of birth, home address, phone/mobile numbers of each partner (attach continuation sheet if required) 6. VAT registration number (if any) ......................... 7. Address of adjacent premises (within 5 kilometres of production or packaging premises) Phone number.
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8. Intended start date for production/packaging 9. Name and address of duty payer (if different from applicant above) Phone number. Email address 10. Payment by direct debit Yes/No (delete as appropriate) 11. Estimated volume of beer (in hectolitres) to be produced and/or packaged in the next 12 months .. 12. Classes of beer which you wish to hold and/or package in duty suspension (see below) 13. The names and addresses of other brewing/packaging premises owned (attach continuation sheet if required) .. 14. The name and address of any connected breweries (see paragraph 8.4) . 15. Other associated brewery/packaging premises .. 16. Name and address of proposed duty guarantor (where applicable).
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17. Applicant's signature/status (Sole proprietor, partner, director, etc.) Signature.. Name in block capitals Status 18. Date Please attach a plan of all of the premises to be registered The following are the classes of beer which may be held in duty suspension: A Bulk beer held on the same or adjacent premises at which it was produced.
B Packaged beer held on the same or adjacent premises at which it was produced or packaged. C D Bulk beer which was produced elsewhere. Packaged beer which was produced elsewhere.
Please ensure that you only register for those classes of beer relevant to your business activities. Note if you are already registered and are to complete an application form giving details to the National Registration Unit of any changes that may affect your registration (see paragraphs 4.5 and 5.5), please record your Beer Duty Reference Number on the application form.
33. Beer duty return

(Referred to in section 15) The link below takes you to a copy of form EX46 Beer Duty Return, guidance notes on completion and continuation sheet. Beer Duty Return Form
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34. Review and appeal procedures (from 1 April 2009)

34.1 What if I disagree with any decision you make about my affairs?
When we make a decision that you can appeal against, we will tell you and offer you a review. We will explain the decision and tell you what you need to do if you disagree. For example with: the amount of an assessment the issue of a civil penalty, or a decision specifically connected to the relevant duty.
You will usually have three options. Within 30 days you can: send new information or arguments to the officer you have been dealing with have your case reviewed by a different officer, or have your case heard by an independent tribunal.
A review will be handled by a different officer from the one who made the decision. If you prefer to have an independent tribunal hear your case, you must write directly to the Tribunals Service.
34.2 Is there a time limit to ask for a review?

Yes. If you want us to review a decision, you must write to the person who issued the decision letter, within 30 days of the date of that letter. We will complete our review within 45 days, unless we agree another time with you. You cannot ask the tribunal to hear your case until the 45 days (or the time we agreed with you) has expired, or we have told you the outcome of the review. If you are not satisfied with the reviews conclusion, you have 30 days within which to ask the tribunal to hear your case. If we cannot complete our review within 45 days, or any time we agreed with you, we will ask you whether you are willing to agree to an extension so that we can complete the review. If you do not agree to an extension, the review is treated as concluding that the decision being reviewed is upheld. We will write and tell you this, you then have 30 days from the date of that letter to ask the tribunal to hear your case.
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34.3 What must I include in my request for review?

Your request should set out clearly the full details of your case, the reasons why you disagree with us and provide any supporting documentation. You should also state what result you expect from our review.
34.4 What if I do not want a review?

If you do not want a review, you may appeal to the independent tribunal. You need to send your appeal to the Tribunals Service within 30 days of the date on the decision letter.
34.5 Where can I get more information?

You can find further information about reviews and appeals in fact sheet HMRC1 HMRC Decisions What to do if you disagree. You can get this fact sheet on our website or by phoning our Orderline on 0845 900 0404. You can also find more information about how to appeal on the Tribunals Service website or by phoning 0845 223 8080.
35. Glossary
Term AAD ABV Accounting period Adjacent premises Description Administrative Accompanying Document Alcohol by volume (see alcoholic strength). A calendar month, or such other period as may be authorised. Premises not further than five kilometres from registered breweries or registered packaging premises. Ratio of the volume of ethyl alcohol contained in any liquor to the volume of liquor, including the alcohol (expressed as a percentage to one decimal place). The Alcoholic Liquor Duties Act 1979. Decrease in gravity during fermentation. Occupier or operator of a tax warehouse. See paragraph 2.1
Alcoholic strength
ALDA Attenuation Authorised warehouse keeper Beer
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CEMA Co-operated brewery
The Customs and Excise Management Act 1979. See Section 8. If beer is produced in more than one brewery during a calendar year, or a person is connected with any person who produces beer in any other brewery in the year, then that person's brewery is part of a group of connected breweries for the purposes of the small brewery beer reduced rates scheme ALDA section 36E and The Beer and Excise Warehousing (Amendment) Regulations 2002. The time when the duty becomes payable, whether or not payment is deferred. An arrangement, which allows goods liable to Excise duty to be produced, processed, held, received and despatched without payment of duty. Electronic Administrative document that is submitted by the consignor using the computerised system EMCS. The duty charged on beer under ALDA Section 36. A place approved by HM Revenue & Customs under CEMA Section 92 for the storage of goods on which Excise duty is suspended. The ratio of the weight of a volume of any liquid to the weight of an equal volume of distilled water. One hundred litres. Containers in excess of 10 litres (casks and kegs). The specific gravity of wort before fermentation. An officer of HM Revenue & Customs To put beer into tanks, casks, kegs, bottles or any other receptacles of a kind in which beer is distributed to wholesalers or retailers. A description of beer according to its brand name, package size and alcoholic strength. A person who produces beer on any premises in the United Kingdom registered under ALDA Section 47(1) in respect of those premises. Any premises in respect of which a registered brewer
Duty point Duty suspension
E-AD
Excise duty Excise warehouse
Gravity Hectolitre Large pack Original gravity Our officer Package
Product Registered brewer
Registered brewery
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is registered under ALDA Section 47(1). Registered holder A packager of beer or a registered brewer registered under ALDA Section 41A in relation to any registered premises. A brewery or store registered under ALDA Section 41A on which a registered holder may hold duty unpaid beer without payment of that duty. Single Administrative Document Alcoholic strength. See section 8. Beer, other than that brewed under licence, produced by eligible breweries in the UK or overseas ALDA Sections 36 and 36A H. Containers of 10 litres or less (bottles and cans). Integrated Tariff of the United Kingdom. Premises in which Excise goods may be produced, processed, held, received and despatched under duty suspension. Registered premises and Excise warehouses are tax warehouses. Device inserted into cans and bottles which recreates the effect of draught beer when it is poured. The produce of mashing.
Registered premises
SAD Strength Small brewery beer
Small pack Tariff Tax warehouse
Widget The produce of mashing.
How we use your information

HM Revenue & Customs is a Data Controller under the Data Protection Act 1998. We hold information for the purposes specified in our notification to the Information Commissioner, including the assessment and collection of tax and duties, the payment of benefits and the prevention and detection of crime, and may use this information for any of them. We may get information about you from others, or we may give information to them. If we do, it will only be as the law permits to: check the accuracy of information prevent or detect crime protect public funds.
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We may check information we receive about you with what is already in our records. This can include information provided by you, as well as by others, such as other government departments or agencies and overseas tax and customs authorities. We will not give information to anyone outside HM Revenue & Customs unless the law permits us to do so. For more information go to www.hmrc.gov.uk and look for Data Protection Act within the Search facility.
Do you have any comments or suggestions?

If you have any comments or suggestions to make about this notice, please write to: HM Revenue & Customs Alcohol Team 3rd floor West, Ralli Quays 3 Stanley Street Salford M60 9LA
Complaints
If you are unhappy with the way we have handled your affairs (because of delays or mistakes, for example) please tell the person or office you have been dealing with. If they are unable to sort things out, ask for your case to be referred to the complaints team. For more information about our complaints procedures, go to www.hmrc.gov.uk and under quick links select Complaints.
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Foreword: Further Information

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Foreword: Further Information

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Notice 226 Beer Duty April 2010

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Notice 226 Beer Duty April 2010

1. Introduction 1.1 What is this notice about?

1.2 What's changed?

1.3 Who should read this notice?

1.4 Where can I find the relevant law?

Notice 226 Beer Duty April 2010

The Beer Regulations 1993 (SI 1993/1228).

1.5 Do any parts of this notice have legal force?

2. The basics 2.1 What is beer?

Notice 226 Beer Duty April 2010

2.2 How does the duty system work?

2.3 How do I calculate and pay the duty?

Notice 226 Beer Duty April 2010

2.4 Visits by HM Revenue & Customs

2.5 Will you make an appointment?

2.6 What happens if I fail to meet my legal obligations?

Notice 226 Beer Duty April 2010

3. Registration: general 3.1 General information

3.2 What does registration cover?

3.3 What are the classes of beer?

Notice 226 Beer Duty April 2010

3.4 When must I apply for registration?

3.5 Where do I find out how to apply?

3.6 What happens after I have applied for registration?

3.7 How long will my registration last?

3.8 When would a registration be changed or revoked?

Notice 226 Beer Duty April 2010

3.9 Production by unregistered persons or on unregistered premises

Is registration subject to conditions?

Notice 226 Beer Duty April 2010

4. Registration of producers 4.1 Do producers and their premises have to be registered?

4.2 Which premises must be registered?

4.3 How do I apply for registration?

Notice 226 Beer Duty April 2010

4.4 Exemption from registration

4.5 Changes affecting your registration particulars

Notice 226 Beer Duty April 2010

5. Registration of packagers 5.1 Do I have to apply for registration?

5.2 What does registration cover?

5.3 What premises may be registered?

5.4 How do I apply for registration?

Notice 226 Beer Duty April 2010

5.5 Changes affecting your registration particulars

6. Financial security 6.1 What is financial security?

Notice 226 Beer Duty April 2010

6.2 Why is a guarantee required?

6.3 How do I arrange for a guarantee?

6.4 What is EPSS (Excise Payment Security System)?

Notice 226 Beer Duty April 2010

6.4.2 What are the EPSS authorisation criteria?

6.4.3 How do I arrange for a guarantee if I do not qualify for EPSS?

Notice 226 Beer Duty April 2010

6.4.4 What happens if I do not provide a guarantee?

6.5 Who can act as a guarantor?

6.6 How much will my guarantee cost me?

7. Duty liability 7.1 When does beer become liable to duty?

7.2 When is beer produced?

In relation to the above events, 'beer' includes unfinished beer.

Notice 226 Beer Duty April 2010

7.3 What is the duty point?