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HMRC alcohol tax fraud regulation to cost thousands of jobs

Published:  18 November, 2015

New Government legislation to end alcohol tax fraud could lead to thousands of job losses, a leading insolvency lawyer has warned.

HMRC's new Alcohol Wholesaler Registration Scheme (AWRS) will be compulsory for anyone trading in liquor from January 1, 2016.

"Many small businesses in this trade sector operate on very small margins," said Matthew Whyatt, director and head of corporate recovery and insolvency at north-west law firm Cassell Moore. "Any disruption to their ability to trade even for a short time could be disastrous.

"Many thousands of people are employed in this trade sector. Delays could see significant job losses.

"I struggle to see how HMRC has the resources available to deal all of the issues that will arise with AWRS.

"The department has lost 11,000 posts since 2010, and many of those leaving were the core, experienced staff recruited in the early 1970s at the introduction of VAT.

"The last figures for staffing that were mentioned was for a command of approximately 70 staff.

"The last estimate for applications to the scheme in year one was approximately 14,000.

"If HMRC struggles to handle not only the applications but officer reviews and independent reviews prior to their deadline, will taxpayers be able to continue to trade?"

The AWRS is designed to clamp down on excise evasion, which is estimated to cost the Treasury £100 million every year.

Only those judged fit and proper by the HMRC to trade in alcohol will be granted permission to do so.

A former HMRC senior manager with extensive experience in this area, who did not wish to be named, has also voiced concern.

"There is significant scepticism amongst the already stretched rank and file officers about the benefits of AWRS," he said.

A spokesman for the HMRC declined to comment.