Alcohol Wholesaler Registration Scheme (AWRS) – update

Our monthly newsletter issued earlier in the week confirmed that this scheme was still due to go live on 1 January 2016, following a delay from its original implementation date of 1 October 2015.

In anticipation of this, HMRC have now published an Excise Notice which seeks to give further detail of and to explain the scheme. Certain paragraphs in this notice carry the force of law.

As a reminder, the AWRS requires businesses who ‘wholesale alcohol’ at or after the point at which Excise Duty is payable to be approved by HMRC.  Businesses will be required to apply to HMRC for approval and need to pass a ‘fit and proper’ test in order to be approved to trade. It is an offence to trade without approval.

HMRC will maintain a register of approved wholesalers. Businesses purchasing alcohol from an AWRS wholesaler must check, via HMRC’s online look up service, that the wholesaler is approved. It will be an offence to buy alcohol from an unapproved wholesaler.

The notice can be found here: 'Excise Notice 2002: Alcohol Wholesaler Registration Scheme'. 

From 1 January 2016, businesses with a UK establishment who sell, offer or expose for sale or arrange to sell, alcohol to other businesses at or after the duty point must apply to HMRC for AWRS approval and do so by 31 March 2016.   Failure to do so will mean you are liable to heavy penalties and possibly forfeiture of stock if you continue to trade after 31 March 2016. A failure to apply for approval means you are automatically considered as trading without approval. Affected businesses have a very limited time frame to apply for approval.

Paragraph 3.9  of the notice has examples of the types of businesses that fall within the scope of the scheme.  This would include a pub retailer with a wholesale arm to their business.

From 1 April 2017, trade buyers who buy their alcohol from UK wholesalers for resale will need to make sure that these wholesalers are approved by HMRC. The check will be made using an online look up service, and using this to check the validity of wholesalers will form part of these businesses’ ‘due diligence’ processes.

The scheme only covers sales that are made in the course of a trade or business to other businesses. For example, it does not apply to private individuals purchasing alcohol from retailers for their own use.

For more detail, please do not hesitate to contact us.

Updated 14 December 2014  -  HMRC have now released a webinar setting out the background and detail of these changes.  This can be found here:  https://attendee.gotowebinar.com/recording/5287369269734947074