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European plans could bring higher tax by the back door for RTDs says duty expert

Published:  11 September, 2015

A European Commission consultation could bring lower tax rates for small wine and spirits producers - but is threatening the UK's RTD manufacturers, a leading excise duty consultant has warned.

The consultation was launched at the end of August but has remained largely under the radar until now, Alan Powell told Harpers Wine & Spirit's sister publication Off Licence News.

Many RTDs are classed as made wines rather than spirits because of the way they are produced, and so enjoy a lower duty rate than they would if classed as spirits.

But Powell, a former HM Revenue & Customs policy officer, told Off Licence News' Christine Boggis that the European Commission, under lobbying from some of its member states, has been waging a war on such drinks for nearly a decade - claiming they are misleading consumers - and may use the consultation to "shoehorn" them into a higher tax band.

He said: "This consultation is dynamite. It contains an underhand attack by the Commission on particularly UK products. This battle has been won in law, and now they have brought it into this questionnaire to imply something fishy is going on when it isn't."

The consultation also asks respondents to comment on whether small wine and spirits producers should enjoy similar low tax rates to small breweries.

Anyone classed as a business can take part in the consultation.

He said: "It is an opportunity to have your say and have a say in formulating European and national law."

The third important issue in the consultation, said Off Licence News, is the abuse of industrial alcohol, which can contain harmful chemicals but is being bottled and sold as spirits by some criminals - a small but growing problem in the UK.

You can find the consultation here.