Registration – a real win for all legitimate and law-abiding wholesalers

A new registration scheme for alcohol wholesalers announced today (December 10) will be “a massive boost for legitimate traders and taxpayers”, according to the Federation of Wholesale Distributors (FWD).

The Alcohol Wholesaler Registration Scheme (AWRS), which will be included in the Finance Bill 2015, is intended to stamp out duty evasion on beers, wines and spirits, which costs the Treasury £1.3bn a year in lost revenue. Originally proposed to government by FWD, the scheme will require any business trading alcohol in wholesale volumes to undergo stringent tests to ensure they are trading with in the law. Licenced retailers will also be required to demonstrate that their alcohol products are sourced from registered wholesalers.

FWD chief executive James Bielby said: “This is a major step towards identifying rogue operators and restoring control of alcohol distribution to legitimate wholesalers. We have worked hard to bring this issue to the Government’s attention, and although compliance with the scheme will place an operational burden on our members, it really is a short-term pain for a long-term gain.”

Wholesalers will be required to register during a three-month application window from 1 October 2015 to 31 December 2015, or face a penalty. HMRC will then undertake a programme of pre-approval visits from January 2016, lasting approximately 15 months.  During that time HMRC will remove the right to trade in alcohol from any trader failing the AWRS ‘Fit and Proper’ criteria.

From April 2017, wholesalers will be required to display a Unique Reference Number (URN) on all invoices involving alcohol, and to provide it upon request to anyone purchasing from them. Retailers will be expected to make regular checks to ensure a wholesaler’s fit and proper status has not changed, via an online registry.

James Bielby added: “Over the next nine months we will be keeping our members up to date on the requirements of the scheme, to ensure that they meet the standards within the timeframe.”

Notes:

The draft legislation overview documents for the Finance Bill 2015 is published today (December 10).

The documents can be viewed online here. It includes the following:

3.7. Registration of Alcohol Wholesalers.

As announced at Autumn Statement 2013, legislation will be introduced in Finance Bill 2015 to require all UK based wholesalers that sell or arrange a sale of alcohol at or after an excise duty point, to be approved by HMRC. It will also make provision to allow regulations to be made regulating the approval and registration of approved persons.

The legislation will also introduce new penalties for trading without approval and for purchasing from an unapproved wholesaler. The requirement to be approved will take effect from 1 January 2016. The scheme will be introduced in full from 1 April 2017.

It also provides further detail on the legislation, including the following key points:

Existing and new businesses trading wholesale in alcohol will be required to submit an application for registration. They must demonstrate to HMRC that they fulfil certain ‘fit and proper’ criteria, as well as complying with new record keeping obligations and operating due diligence when making purchases, to prevent exposure to the illicit alcohol market. Additionally, wholesalers and retailers of alcohol will be obliged to purchase alcohol only from registered wholesalers.

Timetable

  • Legislation will be introduced in Finance Bill 2015 to amend the Alcoholic Liquor Duties Act 1979 (ALDA 1979).
  • The law will be enacted on and after the date of Royal Assent to Finance Bill 2015.
  • This measure will take effect from 1 October 2015 when a three month application window will open for wholesalers.
  • Secondary legislation will come into force on and after 1 October 2015.
  • HMRC will undertake a fifteen month programme of assurance activity from 1 January 2016 to assess whether all these businesses meet the ‘fit and proper’ criteria.
  • Any new business which wishes to start trading and which has not applied to register before 1 January 2016 must apply to HMRC at least 45 working days before they intend to operate as HMRC will assess their ‘fit and proper’ status prior to their commencement.
  • On and after 1 April 2017, the obligations for those who purchase alcohol from wholesalers will come into effect. This will include retailers of alcohol as well as wholesalers purchasing alcohol from other wholesalers.

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