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Alcohol Wholesalers Registration Scheme

Alcohol Wholesaler Registration Scheme (AWRS)

Changes to trading in alcohol are taking place from October 2015. If you’re an alcohol wholesaler, or trade buyer of alcohol, you’ll need to start thinking about preparing very soon.

 Who does this scheme apply to?

The scheme will apply to existing, and new, wholesalers of alcohol, trading at or after the point at which excise duty has become payable. In addition, all businesses who trade in or retail alcohol will need to make sure in future that any UK wholesalers that they buy from are registered with HMRC. The types of business who will be affected include:-

·         alcohol wholesalers

·         brokers

·         auctioneers

·         alcohol retailers

The scheme does not apply to private individuals purchasing alcohol from retailers.

What is changing?

From October 2015, all alcohol wholesalers will apply online to HMRC for AWRS registration, then from April 2017, all businesses who trade in or retail alcohol will need to make sure that any UK wholesalers they buy from are registered with HMRC

Alcohol for wholesale or retail being purchased directly from abroad, or from another retailer whose wholesale sales are purely incidental to their retail business, is not affected.

What the registration scheme will do

Alcohol fraud costs UK taxpayers approximately £1.3billion each year in lost duty and VAT. The new scheme will introduce measures designed to prevent the wholesale of duty evaded alcohol, making it more difficult for organised criminals to distribute their products in the UK. HMRC wants to remove illicit alcohol from alcohol supply chains, reduce the amount lost in duty and VAT and level the playing field across the alcohol trade for all legitimate traders.

What alcohol wholesalers will need to do

All alcohol wholesalers, including those who already hold other excise registrations, will have to submit their AWRS application between October and December 2015. In January 2016, HMRC will begin assurance work to determine whether the applicants are ‘fit and proper’ to be accepted onto the register and by definition continue to trade in the alcohol sector.

For a business to be considered ‘fit and proper’ HMRC will assess its application and then, if necessary, carry out a pre-registration visit.

Fit and proper

HMRC will be looking to make sure that:

  • there is no evidence of illicit trading
  • the applicant, or any person with an important role in the business has not previously been involved in any significant revenue non-compliance or fraud
  • there are no connections between the business, or key persons involved in the business, with other known non-compliant or fraudulent businesses
  • key persons involved in the business have no unspent criminal convictions which we consider relevant - for example offences involving any dishonesty or links to organised criminal activity
  • the application is accurate and complete and there has been no attempt to deceive
  • there have not been persistent or negligent failures to comply with any HMRC record-keeping requirements
  • the applicant has not previously attempted to avoid registration and traded unauthorised
  • the business has provided sufficient evidence of its commercial viability and/or credibility
  • there are no outstanding, unmanaged HMRC debts or a history of poor payment
  • the business has in place satisfactory due diligence procedures to protect it from trading in illicit supply-chains.

The criteria above are not necessarily exhaustive. HMRC may refuse approval to a wholesaler for reasons other than those listed if they have concerns that the applicant is a serious risk to the revenue.

Now is the time for businesses to review their processes and supply chains to make sure they are sourcing only legitimate alcohol. This is vital because HMRC will look for evidence that applicants have good standards of record keeping and robust safeguards to avoid exposure to the illicit trade. This includes effective due diligence on their suppliers and, where appropriate, their customers.

HMRC will check all applications and carry out any necessary visits between January 2016 and April 2017. Wholesalers will therefore hear the outcome of their applications at different times, but certainly by April 2017. Critically, where a business fails the scheme’s ‘fit and proper’ test, HMRC may remove its right to wholesale alcohol at any time during the introduction of the scheme. After April 2017, wholesalers and alcohol trade buyers (for example brokers, auctioneers, alcohol retailers) must also source alcohol only from HMRC approved businesses (unless they are buying direct from abroad or from another retailer whose wholesale sales are purely incidental to their retail business).

 What alcohol trade buyers need to do

HMRC is currently asking trade buyers to review their supply chains to satisfy themselves they are doing all they can to only source genuine tax-paid alcohol.  Buyers might check that their own wholesalers are aware of the scheme, so they can prepare for the changes. From April 2017 trade buyers must only buy alcohol from HMRC approved wholesalers. HMRC will provide an online look-up database of approved traders for buyers to use and  using this  to check the validity of wholesalers will form part of the buyer’s ‘due diligence’ processes.

Penalties

New criminal and civil sanctions will be introduced for wholesalers and trade buyers caught purchasing alcohol from non-registered wholesalers. Penalties for wholesalers will start from 1 January 2016, while penalties for buyers will start from April 2017. In addition, any alcohol found in the premises of unregistered businesses may be seized, whether or not the duty has been paid.

Businesses will have a similar right to review and appeal, as they do for other HMRC regimes, for any civil penalties raised or decisions related to their approval. 

TOBACCO DISPLAY BAN GUIDE

A NEW trade guide for independent retailers and wholesalers selling tobacco has been produced by the leading industry trade associations – the Scottish Wholesale Association (SWA) and the Scottish Grocers’ Federation (SGF) – to help the industry fully comply with the new changes to tobacco display requirements included in the Tobacco and Primary Medical Services (Scotland) Act 2010.

The ‘Fingertip Guide to the New Tobacco Display Laws’ has been published by the SWA and SGF in partnership with leading tobacco companies JTI, Imperial Tobacco and British American Tobacco. It is also available via an iPhone/iPad app.

Acknowledged by the Scottish Government, the new guide – a comprehensive reference guide to the legislation governing the display of tobacco in independent retailers and wholesalers in Scotland – is designed to help the industry understand the law and, crucially, fully comply with the new legislation.

It outlines the legal ‘Dos and Don’ts’ covering the introduction of the new legislation. Shops with a selling area larger than 280 square metres (3,000 square feet) are classified as a ‘large shop’ and therefore must fully comply with the law by 29 April 2013 while shops with a selling area smaller than 280 square metres are classified as a ‘small shop’ and must be fully compliant by 6 April 2015.

The new guide is not intended to be a comprehensive guide to the law. Instead, it is an extremely valuable reference guide for retailers and wholesalers who should keep copies handy to allow them – and their staff – to refer to it at any given time. It is written in an easy-to-understand format and uses a Q&A approach, answering the questions that retailers and wholesalers will most likely want to ask.

John Drummond, chief executive of the SGF, said: “This is an extremely useful guide for our members as it provides invaluable assistance to retailers who may be unclear as to what their legal obligations are. It provides an easy-to-understand reference using a simple Q&A format to cover all the key points and areas of uncertainty.”

 SGF Tobacco Display Ban guide.pdf

On Patrol with the Edinburgh CAP

SGF has been involved in the East Edinburgh Community Alcohol Partnership since its inception. The CAP operates in the Portobello and Piershill areas of the city and has become very well embedded within those communities. 

SGF recently joined other partners, including Police Scotland, on a night-time ‘joint patrol’ on the mean streets of the Portobello area. The joint patrols are an important (and unique) aspect of the CAP. They aim to raise the profile of the CAP and establish a good working relationship between Police Scotland and retailers. They also aim to identify hotspots for underage drinking and any alcohol-related Anti-Social Behaviour.

We found there is a good awareness of the partnership amongst retailers and that there does seem to be a rapport between them and Police Scotland. The CAP recently carried out a proxy purchase campaign and retailers in the area seem to be on-top of this problem (as much as they can be). For underage purchases we were surprised to learn from retailers that tattoos are being used as an informal form of ID. The under-age purchaser will reveal his/her tattoo to the retailer and put forward the proposition that if they are old enough to be tattooed…..we are glad to report that this approach is not proving to be effective.

Incidents of anti-social behaviour in the CAP area during 2014 fell by 16% compared with 2013. Police Scotland have described this as a remarkable figure - responsible retailing is playing a significant part in this.

SGF Response to E Cigarette Consultation

SGF has responded to the Scottish Government consultation on electronic cigarettes and strengthening the control of tobacco. In it;s response SGF opposes the proposal for a separet register for e-cigarette retailers.

The response can be found here

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