The absence of a national alcohol strategy may be a current alcohol policy hot topic, though alcohol tax fraud has had its own new alcohol strategy released.
'The HMRC Alcohol Strategy: Modernising alcohol taxes to tackle fraud and reduce burdens on alcohol businesses' [pdf] aims to reduce the alcohol tax gap of around £1.2 billion, estimated to be worth 8% of the total £10.5 billion tax revenue (including VAT). However HMRC figures suggest the trend has been broadly flat over recent years, suggesting the scale of the challenge.
The strategy outlines some of the complexities behind fraudulent alcohol sales, which are dominated by ‘inward diversion’ - where large consignments of genuine alcohol brands are sent to the near-continent but then smuggled back into the UK untaxed. Other fraud such as illicit production, under-declaration and non-payment of liabilities exist but on a much smaller scale. Beer makes up the majority of untaxed supply, followed by spirits then wine.
In 2012 HMRC came under fire for failing to tackle alcohol tax fraud in a report from the Commons Public Accounts Committee. The previous Government then consulted on potential legislative measures to help prevent and tackle alcohol fraud resulting in a number of initiatives and the current strategy.
Perhaps of most interest to many readers wil be HMRC's intention to 'modernise' alcohol taxes - pricing mechanisms being a key topic in alcohol policy debates. Currently different tax systems for different drinks restrict the potential for coherent use of taxation as a pricing lever, but changes are restricted by EU law. However HMRC's strategy appears to set out no direct intention to change the broader tax system, rather than to 'improve the alignment of these taxes and schemes, reducing complexity and duplication' via technology and 'streamlining'.
The Alcohol Wholesaler Registration Scheme (AWRS) was launched in January 2016 requiring those selling alcohol to other businesses to register. From April 2017 all businesses buying alcohol from UK wholesalers will be required to check the wholesalers are registered with the scheme. Certainly the intention for more verified and accountable wholesale practice makes sense, but only time will tell how much of an impact it will have.
The strategy outlines further areas new for 2016, including using new intelligence systems to analyse how alcohol is being moved around the EU. HMRC will 'run taskforces, including exploring new ways of working with local authorities Trading Standards, licensing officers, police and others to tackle illicit trading evident at retail level', and 'continue to assess emerging threats from internet and distance sales'. HMRC with Border Force have plans to 'significantly increase the volumes of risk-based interceptions and challenges'. Watch this space.
HMRC encourage reporting on alcohol fraud, smuggling or tax evasion via www.gov.uk/report-tobacco-or-alcohol-tax-evasion.
Below Cost Ban guidance updated
If any new alcohol document was worthy of being a footnote, the updated guidance on banning the sale of alcohol below the cost of duty plus VAT could be it. Whilst its content may be clear, whether any alcohol sales actually fall below 'cost', or indeed any retailers or enforcement agencies pay any attention to it is a another matter. We've not heard of any, other than reported loss of staff alcohol discounts in some supermarkets.
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