Ask the Collective
The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
What is the timing and magnitude of the expected alcohol duty increase?
As of the discussions captured, the UK alcohol duty landscape was uncertain but members were tracking several potential scenarios. **Anticipated increases:** - A **14.2% increase** was being discussed as a likely figure - Duty per pure litre was cited at **£32.82** (for duty-paid customers) - Per-case duty was calculated at **£45.27**, or **£7.54 per bottle** - The increase was expected to follow **September RPI inflation at 12.6%** (per the Autumn Statement 2022 policy costings) **Timing:** - Members believed the increase would take effect on **1st February 2023** (though some noted uncertainty) - One member flagged that **January NGS (National Guaranteed Shelves?) costs would also increase**, making end-of-December stock clearance particularly attractive - **Page 71 of the Autumn Statement 2022 Policy Costings** was cited as the source document; **Page 63** noted a delay to the reform implementation date to August, which *might* affect the timing - Importantly, **HMT later confirmed to the WSTA that no uprating decision had been made in the Autumn Statement itself**—the decision was still pending, with the Alcohol Duty Review to continue as planned **Strategic responses members discussed:** - Members recommended **moving stock out of bond ahead of the increase** to avoid paying higher duty - Clearing bonded stock the day *before* the duty increase took effect, then raising prices on duty day, was flagged as a tactic - Some considered **taking a loan to move bulk stock pre-Christmas** if the increase was confirmed and the February timeline held - **WSTA membership** was highlighted as valuable for tracking official announcements - Members noted the complexity of **price-marked packs post-duty increase** as a headache to manage **Caveats:** - The February 2023 date was stated with explicit uncertainty ("I think it's February 2023 but might be wrong") - One member noted that **only once they could recall duty being dropped** historically, so increases were the norm - Whether to pass the full increase to customers or absorb some into margin was debated; in the current cost-of-living climate, **most members favoured passing on the increase in full**, as other costs were rising too and any absorption would "just get lost" - Cash reserves were flagged as a constraint for those planning to pre-clear bonded stock
What is the current UK spirits duty rate and timeline for increases?
Members confirmed that UK spirits duty was increased from 1 August 2023, with the rate rising to approximately £1.35 per litre at 40% ABV. The increase aligns with inflation at roughly 10% year-on-year, with the rate now fixed. Members noted that lobbying efforts may attempt to influence future government decisions, but the current trajectory appears locked in unless there is a significant policy reversal. One member shared a link to just-drinks.com reporting on the duty changes, suggesting that's a reliable source for tracking updates.
Do I need to pay excise duty on product samples taken out of bond for promotional campaigns?
Yes, you must pay excise duty on samples removed from bond regardless of purpose—there is no duty exemption for promotional sampling. Members confirmed the hard rule: **excise duty applies to any stock taken out of bond**, whether it's for sale or sampling. There is no mechanism to claim duty back on samples that aren't sold. Your only duty-suspended options are: - **Export the samples duty-suspended** to avoid paying duty upfront - **Destroy the stock in duty suspension** and make a formal declaration to HMRC If samples remain in the UK for promotional use (e.g. Ocado sampling campaigns, retailer gift boxes), duty must be paid at the point of removal from bond.
What is the correct procedure for disposing of out-of-date and damaged duty-paid alcoholic stock, and how should it be recorded for tax purposes?
For duty-paid alcoholic stock (such as canned RTDs), you may be eligible to claim excise duty drawback when disposing of out-of-date or damaged goods. However, the process depends on your specific circumstances. **Key steps and considerations:** - **HMRC Excise Notice 207** — consult the official guidance on excise duty drawback procedures at https://www.gov.uk/government/publications/excise-notice-207-excise-duty-drawback/excise-notice-207-excise-duty-drawback. This is the authoritative source for how to record and claim drawback. - **Ingredient sourcing matters** — if you've purchased duty-paid ingredients (rather than bulk excisable goods), the drawback process may be more complicated, so clarify your supply chain before proceeding. - **Volume threshold** — for very small volumes of stock, the administrative effort and cost of claiming drawback may outweigh the tax recovery, so assess whether it's worth pursuing for minor quantities. - **Recording** — ensure proper documentation and accounting records are kept to support any drawback claim. **Caveat:** Members suggested exploring local options for stock reallocation (e.g. Canvas) before disposal, to avoid the drawback process altogether if the stock can be used or sold elsewhere.
What is the process for claiming back excise duty on drinks products when exporting to the EU?
The community acknowledges this is a legitimate but time-intensive process. Members recommend weighing the administrative burden against the financial return before pursuing a claim. **Getting expert help:** Rather than navigating HMRC claims alone, members suggest connecting with someone who handles excise duty claims regularly. Members have offered to introduce contacts who manage this process for drinks businesses. **Key consideration:** The effort required to gather documentation and manage the claim process may not justify the recovery amount for smaller export volumes. Factor in your time cost against the actual duty reclaim value before committing resources.
How do duty payments work when operating a brewery and distillery on the same site, particularly when producing duty-suspended whisky spirit?
When operating a brewery and distillery together, the key is maintaining clear separation and documentation. Members operating multi-site or multi-purpose facilities report that HMRC compliance requires: clear designation of areas on your site plans separating brewery from distillery operations; meticulous records distinguishing duty-suspended stock from duty-paid stock; and separate accounting for each operation. Members' practical experience: - **Designated warehouse areas** — Ensure your site plans clearly identify separate zones for beer production (duty-paid) and spirit production (duty-suspended). This prevents confusion with HMRC about which product is subject to which duty regime. - **Duty-suspended spirit sales** — Members are successfully selling whisky spirit duty-suspended to third-party partners who store it in warehouses under their WOWGR (Warehouse and Other Goods Regulations), without this affecting the duty calculations on concurrent beer production. The key is that duty suspension and duty-paid operations are treated independently if areas and records are properly designated. - **Meticulous stock records** — Maintain detailed records of what is held duty-suspended versus duty-paid. This documentation is critical for HMRC audits and compliance. **Caveat:** HMRC's guidance on this scenario is unclear and sometimes contradictory. One member noted that HMRC themselves "don't seem able to give a straight answer" on the implications. Get written confirmation from your local HMRC office on your specific site layout and product mix before scaling production.