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 duty changes on spirits are expected in the upcoming HMRC budget announcement?
Members anticipate a spirits duty increase of 30–35p per 70cl bottle of 40% ABV (roughly £0.20–£0.29 per litre), with the announcement expected on 27 October. However, there is uncertainty: if the government states "no change to government policy" on spirits duty, this will in effect trigger an automatic 4.9% rise in line with RPI. The government is expected to simplify the duty structure by targeting growth categories (pre-mixed drinks, seltzer) while being gentler on UK beer—the most vocal complainants. Members also highlight ongoing industry lobbying through the BDA and WSTA to scrap the duty stamp scheme, which was introduced post-Brexit to prevent cross-border duty arbitrage but is now seen as unnecessary bureaucracy. There is frustration that craft-producer relief schemes (similar to the US Craft Beverage Modernisation and Tax Reform Act model) remain blocked by lobbying from large spirits producers, despite years of campaigning.
What are the new UK alcohol duty bands, rates, and effective implementation dates under the duty reform?
The UK government has radically restructured alcohol duty to tax all products in proportion to their alcohol content. The system moves from 15 duty bands to 6 standardised bands across all product categories. **New duty bands:** - 1.2–3.4% ABV (reduced rate to encourage low-strength innovation) - 3.5–8.4% ABV - 8.5–22% ABV - Above 22% ABV Above 8.5% ABV, all products (beer, wine, cider, spirits, etc.) pay the same rate of duty based on alcohol content, removing category-specific advantages. **Key reliefs and incentives:** - **Reduced rates for products below 3.5% ABV** — designed to encourage manufacturers to develop lower-alcohol options - **Small producer relief** — applies to smaller producers of wine, cider, spirits, and made-wine below 8.5% ABV - **Draft relief** — duty rates on draft beer and cider cut by 5% to support pubs and responsible drinking **Implementation:** Effective from February 2022 (note: one member initially stated 2023, but the corrections confirm 2022). The government consulted on detailed regulations with a closure date of 30 January 2022. **Expected market impact:** Members noted that spirits duty will increase, while ciders, sparkling wines, and beer will generally see lower duty. English sparkling wine is expected to benefit significantly. Members warned to consider price positioning ahead of implementation, as regulations may shift during the consultation period. **Northern Ireland caveat:** Northern Ireland may face different duty bands or rates depending on EU negotiations during the consultation period, so the framework may not apply uniformly across the UK.
What are the practical options for getting RTD canned cocktails into the French market given the combined alcohol duty and sugar tax?
France's combined alcohol duty (€0.23 per unit) and sugar tax (€1.31 per unit) effectively closed the RTD canned cocktail market almost overnight—it was a deliberate policy to target youth drinking. Retail viability is extremely difficult under current taxation, but members identified a few approaches others have attempted: - **Desperados** — the primary successful RTD retail brand in France; uses a tequila base, suggesting spirit-based positioning may help navigate the tax structure - **Féfé** — another visible RTD brand, though category presence remains minimal - **Reformulation to malt-based or sugar-free**: Members suggest swapping sugar for sweeteners (referenced as a tactic Britvic uses) or moving to a neutral malt base to reduce tax exposure. One member offered to help with reformulation and can share ingredient suppliers if needed - **Increase ABV**: One experienced producer noted "up the abv is the only way" - **Contact Aston Manor**: They have a parent company in France and produce high-sugar-content perry and cider-based cocktails; worth approaching for market-entry insights **Important caveat**: The market is heavily constrained. Members noted that RTD cocktails "barely exist" in France at present. The category has been largely replaced by flavoured beers (mango, raspberry, etc.), which sit in a different tax bracket. France remains "a nightmare for the category" overall.
Can liqueur products with 24% ABV be classified as wine for duty purposes to benefit from lower duty rates?
No—the duty classification depends on the base ingredient, not the final ABV. The key rule is that a product must be **51% fermented base and 49% spirit base** to qualify as "made wine" for duty purposes. If your liqueur is spirit-based, it will be classified as spirits regardless of whether it's 24% or 22% ABV, and you'll pay the higher duty rate (approximately £3.45 per 500ml bottle vs. £1.99 for wine-classified products). If your liqueur is wine-based and fortified to 22% ABV or lower, you may qualify for the wine duty bracket. Members confirm this distinction is strict and non-negotiable with HMRC.
What is the HMRC process and form for applying for small producers duty relief on low-alcohol drinks?
Small producers duty relief is a self-governing scheme rather than a formal application process requiring a specific HMRC form. The scheme applies to drinks under 8–9% ABV (such as RTDs and ciders). Members report that the approach is to **keep detailed production records** as proof of eligibility; if HMRC investigates, you present these records to demonstrate compliance. Guidance on the scheme is available from **SIBA** (the Society of Independent Brewers). The relief is not pre-approved; instead, you document your own production and retain evidence in case of audit.
Do you need to pay tax when exporting alcohol from the UK, and how should duty stamps be handled?
When exporting alcohol from the UK to anywhere outside the UK, you must obliterate the duty stamp under HMRC regulations. However, from 1 May onwards, this obligation changes and no longer presents an issue. Members flagged that it can seem counterintuitive to pay tax when moving product internationally—particularly when exporting to nearby markets like France—but the rule applies across all destinations. One member noted that if you're struggling with tax liability on exports, sourcing and purchasing stock locally in your destination country (rather than exporting from the UK) may be a more practical commercial solution, though this requires advance planning. The key takeaway: obliterate duty stamps on export shipments before 1 May; after that date, the requirement no longer applies.
What bookkeeping and accountancy services do members use for VAT returns and corporate tax?
Members typically work with external accountants or bookkeeping agencies rather than in-house staff. Here are the specific options mentioned: - **Addition Finance** (https://www.additionfinance.co/) — Fees scale with business growth; introductions available from members who use them. - **Independent accountant referrals** — Several members have personal accountants handling VAT returns, corporate tax, and payroll; typically £400–£600 per month depending on services required. - **Part-time bookkeepers** — Members are open to sharing introductions for simpler bookkeeping support, though specific names weren't provided in discussion. Members note that costs are usually at the lower end of the £400–£600 range depending on which services you actually need. Several members offered to make introductions to their current providers. One member mentioned navigating Small Producers Relief in VAT returns, suggesting this is a relevant consideration for producer members.
Is there a tax duty rebate available when alcohol is used for non-drinking purposes such as food production, chocolate production, or sanitizer manufacturing?
No. Members confirmed that alcohol used in food products and other non-drinking applications remains fully liable for duty. The key point: even in products where alcohol is a legitimate ingredient (sauces, chocolates, etc.), the duty liability does not change simply because the end use is non-drinking. Members noted that in most food products using alcohol, the alcohol content is such a tiny percentage of the final product that any duty saving would be minimal anyway. There is no rebate mechanism available to reclaim duty on alcohol destined for non-drinking purposes.