Contents
The way you calculate Alcohol Duty changes on 1 August 2023.
2 new reliefs will be introduced for:
- small producers
- products sold on draught
Information on gov.uk about the new alcohol duties
There is a wealth of information on gov.uk describing the new alcohol duties.
- Work out how much Alcohol Duty you need to pay
- Check if you can pay less Alcohol Duty on draught products
- Check if you’re eligible for Small Producer Relief on Alcohol Duty
- How to work out your Alcohol Duty rates if you’re eligible for Small Producer Relief
- How your business set up can affect your eligibility for Small Producer Relief
- HMRC email updates, videos and webinars for Alcohol Duty
Changes to the Online Trade Tariff
From 1 August 2023, the updated excise duties are displayed against the relevant commodity codes.
Instead of using excise codes in the X400 range, the new excise codes are in the X300 range, and cater for both the new Draught Relief and the Small Producer Relief.
The biggest changes that you will see concern the Small Producer Relief (SPR). Take for example excise range 369 (Other fermented products at least 3.5 but less than 8.5% & Sparkling cider exceeding 5.5 but less than 8.5% & eligible for SPR), which is identified with the additional code X369.
This excise code is valid for products with an ABV content between 3.5 and 8.49%.
The online tariff shows that the excise code may not be used for products where the SBV is higher or lower than that range.
Within the acceptable range however, the duty is expressed as follows:
24.77 GBP / % vol/hl - 1.00 GBP for each litre of pure alcohol, multiplied by the SPR discount.
Small Producer Relief is a reduction on the basic (full) rate of excise duty of £1.00 for every litre of pure alcohol multiplied by the Small Producer Relief discount.
Finding the SPR discount
The discount is determined ‘off-system’ using the SPR calculator tool on gov.uk.
At the end of the calculation process, you will be asked to Save a copy of your Small Producer Relief.
This saved copy shows you the:
- Full rate
- SPR discount
- SPR rate
Calculating the impact of the SPR discount
In the calculation described above, the value in the SPR discount column is used to determine the discounted rate.
Let’s say you are trading beer with an ABV between 2.5% and 8.49%.
- the full excise duty rate is £21.01 per litre of pure alcohol
- the SPR discount for a business that will produce 1000 litres of alcohol per year is £4.89 per litre of pure alcohol
For this example import:
- Import quantity is 2,000 litres
- Alcohol by Volume (ABV) is 5%
- Therefore, litres of pure alcohol is 100 LPA
The full excise duty (with no SPR discount) is
- £21.01 * 100 = £2101.00
The reduced excise duty (with SPR discount applied) is:
- (£21.01 * 100) - (£4.89 * 100), which equals
- £16.12 * 100, which equals
- £1612.00
Changes to the Online Trade Tariff API
Introduction of the new SPQ measurement unit
While the display of the duties on the public-facing Online tariff is similar to way in which excise duties are already displayed, the way in which the data is received from CDS and exposed in the Online Trade Tariff API for SPR introduces a new measurement unit, as follows.
For the duty expression described above, there are two measure components, which are the building blocks of the actual duty.
- The first of these components is the £9.27 per ASVX (alcohol by volume by hectolitre)
- The second component reflects the SPR discount, which is referred to via the SPQ unit.
The SPQ unit can be described as “1 * GBP multiplied by the SPR discount”.
This is then subtracted from the base rate of £9.27 per ASVX via the use of the duty expression ID 02.
The net result is (the full duty - SPR discount) multiplied by the litres of pure alcohol (LPA).
Please also note: it is the SPR discount that you will need to supply when you are submitting your declaration in CDS, not the SPQ unit described here.
{
"id": "-1010135121-01",
"type": "measure_condition_component",
"attributes": {
"duty_expression_id": "01",
"duty_amount": 9.27,
"monetary_unit_code": "GBP",
"monetary_unit_abbreviation": null,
"measurement_unit_code": "ASV",
"measurement_unit_qualifier_code": "X",
"duty_expression_description": "% or amount",
"duty_expression_abbreviation": "%",
"measure_condition_sid": -1010135121
}
},
{
"id": "-1010135121-02",
"type": "measure_condition_component",
"attributes": {
"duty_expression_id": "02",
"duty_amount": 1,
"monetary_unit_code": "GBP",
"monetary_unit_abbreviation": null,
"measurement_unit_code": "SPQ",
"measurement_unit_qualifier_code": null,
"duty_expression_description": "minus % or amount",
"duty_expression_abbreviation": "-",
"measure_condition_sid": -1010135121
}
}