We love a craft beer at AccountingWEB, so we were disturbed to hear about a new raft of regulation due to hit alcohol producers and wholesalers in the UK.
In order to clamp down on sales of illegally imported alcohol and fake products produced in the UK, the government has introduced the alcohol wholesaler registration scheme (AWRS). All businesses who sell alcohol to other businesses (i.e. wholesalers) must apply for approval under this scheme by 31 March 2016. This may include alcohol producers who hold an alcohol retail licence (see flowchart).
You may be asked to help your clients with the AWRS application process, as the range of business information required is quite extensive (see Excise Notice 2002, para 6.7). For example the applicant must provide the contact details and VAT numbers of their main suppliers, as well as their own UTR and VAT registration numbers.
The application for AWRS approval must be completed online through the Government Gateway, so the alcohol wholesaler needs a Government Gateway account to do that. If you file all the tax returns for your client as their tax agent, you may expect that HMRC would allow you to apply for the AWRS on behalf of your client as well. You would be wrong in that expectation: the AWRS system has been built without a facility for agents to act for clients.
Approval under the AWRS will only be granted if the business is up to date with its tax compliance and Company House filings, and the owners are judged to be “fit and proper” persons. For this last test HMRC will look for evidence of any illegal activity by the business owners as well as civil tax penalties. The guidance notes say HMRC will check that there are “no outstanding, unmanaged HMRC debts or a history of poor payment.”
The approval process will take some months, which is why the applications need to start now. All alcohol wholesalers need to be approved by 1 April 2017, as from that date it will be a criminal offence to buy wholesale alcohol from a person who should be approved under the AWRS, but who is not approved. Also from April 2017 the wholesaler must include their AWRS unique number (URN) on all of their wholesale invoices.
Once approved for the AWRS, the wholesaler will be required to undertake due-diligence on their supply chains, and record that work. HMRC will have power to audit such records. There are fixed and variable civil penalties for not complying with the conditions of the AWRS.