Subscriber login Close [x]
remember me
You are not logged in.

Customs sets up wholesaler registration scheme in a bid to fight alcohol fraud

Published:  06 December, 2013

News that the government is to insist the drinks sector introduces a new registration scheme for wholesalers in a bid to curb alcohol fraud has been welcomed by trade leaders.



News that the government is to insist the drinks sector introduces a new registration scheme for wholesalers in a bid to curb alcohol fraud has been welcomed by trade leaders.

In yesterday's Autumn Statement, the Chancellor, George Osborne, set out plans for the scheme the government hopes will tackle alcohol fraud which the Treasury now estimates is 7% of alcohol sold in the UK.

It believes a registration scheme, which would effectively see the wholesale sector police itself, could raise a further £200 million a year in duty.  The register will be run by HM Revenue and Customs, and will take effect in 2016.

Full details of the scheme are yet to be published but it will require alcohol retailers from 2014 to take "reasonable steps to ensure that their suppliers and customers are legitimate".

James Lowman, chief executive of the Association of Convenience Stores, said: "The trade in non-duty paid alcohol is blighting communities throughout the country, which has been made possible by a gaping hole in the regulation of the supply chain. Registration of wholesalers has a vital role to play in shutting this down.

He added: "We will work closely with government to make the registration scheme work, and continue to press for more action to close down the businesses trading in direct competition with honest retailers."

The ACS is one trade body that has worked closely with HMRC to create a register for alcohol wholesalers.

Management consultants, Price Waterhouse Coopers, said the success of the scheme would rest on 

the level of penalties issued and how far they were seen as a deterrent to smuggling and illegal activity. "A fraudster can benefit by £80,000 - £120,000 in unpaid alcohol duty for the sale of a single HGV load of illicit booze.  If the penalties are set too low they will be seen as part of the cost of doing business rather than acting to stop the trade," said Matthew Clark of PwC.

Elsewhere the announcement that business rates were to be capped at 2% also drew a mixed response. Phil Orford, chief executive of the national small business organisation, The Forum of Private Business, said:

"Ninety seven per cent of businesses feel property taxation is too high so the extension to Small Business Rate Relief and the cap on business rates to 2% are both welcome, but sit at the lower end of what we were asking for. We feel there needs to be a more fundamental review of business rates and the link to inflation also better transparency over where the rates go.

"The £1,000 further discount for retail properties with a rateable value of less than £50,000 was an unexpected surprise and hugely welcomed. With councils freezing or capping Council Tax, businesses continue to pay a higher proportion of local taxation without seeing real benefits. The system needs a proper review and businesses need more transparency as to where their money is going."

Dan Wagner, chief executive of Powa Technologies, said: "The Chancellor's decision to cap business rates at 2% will go some way to alleviating the pressures on high street retailers. However, for many companies it may be too little too late, especially those companies who are struggling with fierce competition from online. 

"A complete break from business rates for a year would be a far more effective measure to address the challenges facing the high street, and could even save many companies from going under. Capping them for 12 months is a relief, however, it doesn't go far enough to support businesses currently battling to survive in what is an incredibly tough environment."

The decision to freeze duty on petrol was widely welcomed.

Orford added:  "The fuel duty freeze is working for businesses. Less are reporting petrol as a primary cost concern, although of course it remains significant. We welcome the fact that savings have been found to further extend this freeze, saving businesses around £1200 since 2010 according to the Treasury. We are pleased they listened to the voice of small business on this issue."