HMRC sets out new spirits legislation to ease licence applications

HMRC has set out changes to the UK’s alcohol excise duty structure for spirits, making it easier for distillers to become licensed producers.

The proposed changed to Notice 39, which outlines what is required of a business seeking to become a licensed distiller, will benefit the increasing number of craft distillers setting up new businesses.

The proposed changes include making the application process easier to follow, clarifying the term “tax warehouse” and the application procedure to operate a distiller’s warehouse, and simplifying some of the required documents required by business owners when applying.

The document also helps to outline specific timelines for the application process, with 45 working days the standard time to complete an application and receive a licence.

“For the first time, a single HMRC public notice now covers the manufacture of gin and other spirits alongside “traditional” distilling of alcohol”, explains Alan Powell, a specialist in excise duty and co-founder of the newly formed British Distillers Alliance. 

“When finalised, it will give clear guidance and direction not only to the industry but also to HMRC staff having to deal with the licensing and control of spirits producers”.

The HMRC has solicited feedback from trade bodies including the British Distillers Alliance, on how the guidelines might be improved. Powell has welcomed the opportunity for the trade to participate in making recommendations in how the process may be made clearer.

“We commit to work collaboratively with HMRC to produce an effective guidance document for both new applicants and established businesses. This exercise can also go some considerable way to map out a simplified system for the approval and control by HMRC of all alcohol production,” added Powell.

It is hoped the changed will better support the growing number of craft distillers emerging in the UK, to help support this growing industry,

In 2015 a total of 49 new distilleries opened across the UK, with that number rising to 117 in the last five years. The trend is being largely being driven by millennials seeking authentic craft spirits and supported by the growing popularity of gin. Exports have risen by 37% in the past five years, with sales to 139 countries, worth £1.76 billion.