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's the correct process for importing glass bottles from Germany: do we need a VAT deferment account or can we use postponed VAT accounting instead?
You can use postponed VAT accounting rather than setting up a separate deferment account. Here's how members are handling it: - **Postponed VAT accounting** — Register for this in the UK and provide your EORI number and VAT number to your haulier; your German supplier then invoices without VAT, and you account for the VAT on your UK VAT return instead. - **Haulier handles paperwork** — Several members report that their German suppliers or hauliers manage all import documentation once you supply your EORI and VAT details; bottles then arrive with no charge at import. - **Monitor the deferred VAT portal** — VAT entries can take time to appear on the postponed accounting portal, so members recommend asking your accountant to check it each quarter as they prepare your VAT return, otherwise the entry can easily be overlooked. - **Give it to your accountant** — This is a detail easily missed; flag it explicitly during VAT return preparation to avoid surprises. **Caveat:** One member noted this can "become a nasty little surprise" if not tracked properly—make it part of your standard quarterly accounting process.
Can we deliver alcoholic beverages directly to consumers cross-border in EU markets, and how do VAT reclaim and excise duties work?
Direct D2C delivery of alcoholic beverages to EU consumers is heavily restricted by excise duty regulations. You cannot simply ship directly to end consumers; the standard compliant route requires a local registered partner. **Key points from member experience:** - **Local registered partner requirement** — In Netherlands and Germany particularly, you need a locally registered partner to receive the shipment on your behalf. This is mandatory due to excise duty regulations. - **Bonded-to-bonded deliveries** — Deliveries under bond between bonded warehouses are VAT exempt, so VAT reclaim is handled automatically at the bonded level rather than requiring post-import reclaim. - **Third-party compliance services** — Several members mentioned that third-party logistics and compliance providers exist to handle cross-border D2C paperwork and regulations. **Heytipple** was specifically cited as a solution that takes care of all the regulatory and administrative requirements for selling D2C in other markets. **Caveats:** Direct consumer delivery without a local registered intermediary is not viable in DE and NL due to excise regulations. VAT reclaim complexity is largely bypassed if you operate bonded-to-bonded, but you must have a compliant partner structure in place first.
Can VAT payment be deferred on W5 returns when releasing goods from bond, or must it be paid immediately?
The standard practice among members is to pay VAT on W5 returns when releasing goods from bond. However, one member recently encountered a distiller who was deferring VAT payment into their quarterly VAT return while still paying duty immediately on the W5. **Current practice:** - Most bonded distilleries pay VAT on W5 returns immediately (not deferred) - Duty is typically not deferred either, as this keeps cashflow management simpler **Potential alternatives:** - Some members speculate VAT deferment may be possible under a specific VAT payment plan agreed directly with HMRC, though this remains unclear - One member reported receiving confirmation from HMRC that VAT deferment on W5s is possible, though they noted this was "mind blowing" and unexpected **Next steps:** Members recommend contacting HMRC directly to clarify the exact conditions under which VAT deferment is permitted on W5 releases, though the hold times are notoriously long. It may be worth asking whether the deferring distillery has a specific VAT payment arrangement in place that others could replicate.
Do you need to be VAT registered to sell alcohol if your turnover is under the £90k threshold?
No, you do not need to be VAT registered to sell alcohol below the £90k threshold. Members clarified that **AWRS (Alcohol Wholesaler Registration Scheme) registration is separate and can be obtained without VAT registration**. However, a key consideration: if you estimate your sales will exceed £90k in the rolling 12 months ahead, you should register for VAT voluntarily *before* hitting that threshold, rather than waiting. You can also choose to be VAT registered even if you're under £90k if it suits your business. One member noted this would be "backwards" if VAT registration were mandatory for alcohol sales below the threshold, suggesting the regulatory intent is clear on this point.
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.
How should VAT be handled when donating spirits to charities?
No VAT is payable on gifts of spirit to charities. Members confirm that donations of stock are treated as gifts and do not trigger a VAT liability.
How should VAT be calculated when excise duty on alcohol released from bonded warehouse exceeds 20% of the total value?
VAT on goods released from bonded warehouse is charged on the cost price plus duty, not on the selling price or final wholesale price. **However, when duty represents more than 20% of the total value, you must alert HMRC to the discrepancy**, otherwise they will initiate a review process—which members report is tedious and time-consuming. The calculation itself should be: cost price + duty = VATable base, then VAT at 20% on that sum. Failure to notify HMRC when duty exceeds the standard 20% threshold can trigger compliance reviews.