Reclaiming Duty on Residues and Spoilt Beer

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Hi there,

We have a client who recently started running a pub. He has been told it’s “common knowledge” in the industry to “claim back the wastage from the line cleaning”. I asked a friend who used to work at a pub, and she recalls decanting the waste into a measuring vessel, and then recording this amount into a wastage book. However, she doesn’t know if this was simply for adjustments to COS, or if this was used to reclaim the excise duty paid on the residue beer.

Having read some of the internal manuals from HMRC, specifically BEER3880 – Spoilt beer: Keg ullage, it looks as though the duty on spoilt beer and residues can be reclaimed. However, this guidance appears to be for Breweries only.

In our searching we’ve also come across the Spoilt Beer Excise Duty Relief which came about during Covid. This allowed for temporary changes to “the process of destroying beer and claiming excise duty relief”.

Please could someone shed some light on this situation for us? Or perhaps point us to some guidance in the right direction?

Many Thanks,

Davey

 

Replies (4)

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paddle steamer
By DJKL
11th Dec 2023 15:26

Pubs ought to record wastage in a book as it is useful if HMRC make enquiries re margins etc, but other than that have never seen a pub recover excise duty re waste beer.

(If you dilute the waste beer and daily water your roses with it you will grow stunning roses, one of my jobs age 16 when I started working in a local hotel)

Thanks (2)
RLI
By lionofludesch
11th Dec 2023 18:01

Absolutely agree with DJKL.

I would always advise a pub to keep a record of ullages, in case of an enquiry.

Claiming back the duty, though - not sure it can be done, though I suspect it might not be worth the time and effort, even if it can.

Thanks (1)
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By Adman W
12th Dec 2023 14:39

Having worked with a very sharp publican for many years, if there was a way, he would have found it!

workat.awacc wrote:

In our searching we’ve also come across the Spoilt Beer Excise Duty Relief which came about during Covid. This allowed for temporary changes to “the process of destroying beer and claiming excise duty relief”.

 

This was to compensate for the duty paid on the millions of pints that were poured down the drains.
Heineken et al replaced our beer like for like, but we had to prove destruction of the beer, with pictures and video, to allow them to reclaim the duty paid, or at least offset it against the new beer created.

Interestingly we also had to contact Thames Water and advise the amount of beer being poured away, and when, to make sure the sewers weren't overconcentarted with beer!

Another story I was told, is that in the good old days, the driptrays and empties would be filtered and returned to the kegs to be resold the following day....

Thanks (2)
Replying to Adman W:
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By CardiffAccountant
14th Dec 2023 21:11

I worked in a bar some 40 years ago.

The bar manager was very experienced.

We would save all the beer from the drip trays in stainless steel buckets. Lager saved with lager. Bitter saved with bitter and cider saved with cider.

Then, the following day, we would judge the colour of the bitter and then add it to a bitter of similar shade.

You could actually buy the special funnels and filters designed specifically for this purpose.

By the way, having mixed the bitters, the punters would often say, ‘The beers on tonight’, meaning it was particularly tasty.

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