This scheme (the AWRS) has been introduced by HM Revenue and Customs (HMRC) from 1st January 2016, to tackle the problem of alcohol duty fraud in the UK supply chain. Businesses selling alcohol to other businesses may need to apply for AWRS approval and pass a ‘fit and proper person’ test in order to trade. It will be an offence to trade without approval. Those who only sell alcohol to consumers, and not to other businesses, won’t need to apply.
From 1 April 2017 it will be an offence for a trade buyer to buy alcohol from an unapproved wholesaler. Businesses buying alcohol from UK wholesalers for resale will be able to check online whether the wholesaler has AWRS approval.
All B2B sellers, and all trade buyers, will have ongoing due diligence and reporting duties under the Scheme.
What about producers who sell to UK trade buyers?
The AWRS only applies to businesses established in the UK (which includes the Isle of Man for this purpose). The question is whether the producer has a “business establishment” or some other “fixed establishment” in the UK, as defined by the relevant provisions.
What about producers who use an independent UK agent for B2B sales?
The agent is likely to be subject to the AWRS, even though the producer is the contracting party for the sale of the wine to the buyer.
Duty suspended sales
The AWRS will not apply if you only make duty suspended sales to UK trade buyers who continue to hold in duty suspension.
Internet sales to consumers
Internet sales to UK consumers are not wholesale supplies and are outside the AWRS. However, a permitted method for importing alcohol into the UK must be used, enabling duty and VAT to be captured either when the wine is imported or when it is released for consumption.
What you need to do
Applications for AWRS registration must be made between 1st January and 31st March 2016. A business which is subject to the Scheme but fails to apply could face penalties and forfeiture of stock if it continues to trade after 31st March 2016.
Further information or advice
For further information or advice on how the AWRS will affect you please contact Andrew Park. Phone +44 (0)1928 788537 Email email@example.com.
Except where otherwise stated, all information given and any legal opinions expressed on this website assume that English law applies. See Conditions of use.