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The Alcohol Wholesaler Registration Scheme – Registration deadline 31st March 2016 – Act now!

On the 10th December 2014, the government announced the introduction of the Alcohol Wholesaler Registration Scheme (AWRS) which was planned to launch in October 2015, however this was later postponed until 1st January 2016.

Applications for Alcohol Wholesaler Registration can be made online from 1st January 2016. Recent Public Notices make it clear that organisations wishing to apply will also have to be registered with the Government Gateway (GG). It can take a few days for GG registration to be confirmed, so anyone planning to register with AWRS on or near 1st January will need to sign up for GG in advance. Alcohol Wholesalers will be required to complete their registration before the deadline of 31 March 2016 or risk a penalty of up to £10,000 and possible seizure of stock or a criminal conviction.

To register online:

  • Go to the GOV.UK website gov.uk/log-in-register-hmrc-online-services and access the HMRC Online Service
  • Set up a Government Gateway account by following all prompts
  • Complete the application in full through the HMRC Online Service, following all prompts
  1. What is the Alcohol Wholesaler Registration scheme?

Forming part of the 2015 Finance Bill, the Alcohol Wholesaler Registration scheme (AWRS), will require that any business trading or selling in alcohol in wholesale volumes to partake in tests to ensure they are trading within the law. This will include having their supply chains tested to ensure they are legitimate, before being approved to operate in the sector. Once approved, the wholesalers will be entered onto the register.

Licensed retailers will also be affected by this change, and will be required to prove that any alcohol they stock has been bought from a registered wholesaler.

It is predicted that this legislation, originally proposed to government by the FWD, will help to reduce the Treasury’s £1.3bn in lost revenue each year. FWD Chief Executive James Bielby said: “We have worked hard to bring this issue to the Government’s attention, and although compliance with the scheme will place an operational burden on our members, it really is a short-term pain for a long-term gain.”

This legislation is based on the Due Diligence guidelines which are currently part of good practice for wholesalers. Carrying out and demonstrating due diligence will form part of the new AWRS registration and ultimate approval for licensed wholesalers.

Key conditions of your approval which originate in the due diligence guidelines include:

i) Objectively assessing the risks of alcohol duty fraud within the supply chains in which you operate;

ii) Putting in place reasonable and proportionate checks in your day to day trading to identify transactions that may lead to fraud or involve goods on which duty may have been evaded;

iii) Having procedures in place to take timely and effective mitigating action where a risk of fraud is identified; and 

iv) Documenting the checks you intend to carry out and have appropriate management governance in place to ensure that these are, and continue to be, carried out as intended.

An overview of the Due Diligence guidance can be viewed here.

Frequently Asked Questions regarding Due Diligence can be viewed here.

The condition with guidance will be included in the following public notices:

  • Beer Notice 226, Registered Consignee Notice 203a
  • Temporary Registered Consignees Notice 204a
  • Commercial Importer Notice 204b and Authorisation of Warehousekeepers and Approval of premises Notice 196.

These are available from customs.hmrc.gov.uk

  1. How will the Alcohol Wholesaler Registration scheme benefit wholesalers?

For many alcohol wholesalers, alcohol duty fraud is a burden on the industry. Alcohol duty fraud costs UK taxpayers an estimated £1 billion each year. Illicit alcohol is brought into the country by organised criminal gangs, ultimately ending up in legitimate supply chains. This can see illegal goods, many of them low quality, ending up in wholesale depots without the owner’s knowledge.

With 20,000 alcohol wholesalers in the UK, the scheme is a major change to the industry, but one that promises to bring benefits to law abiding wholesalers and their retailers. By introducing these controls, it is hoped that the legitimacy of alcohol wholesalers will be reinforced, strengthening the market and giving retailers more trust in their wholesalers.

ACS chief executive, James Lowman, said: “This is a really positive step for local shops and wholesalers in the battle against the illicit trade, which hurts legitimate businesses. Retailers will be able to check with greater certainty that the wholesalers they purchase alcohol from will be dealing in duty paid products. We will continue to work with HMRC on the regulations and supporting guidance to ensure that application and enforcement of the AWRS does not place extra burdens on retailers.”

  1. What are the penalty’s for not registering?

For those wholesalers who don’t attempt to, or are not accepted on to the register, there will be a number of repercussions; those alcohol wholesalers who are trading without registering are likely to have any alcohol products on the unregistered premises seized, whether or not the duty has been paid. Tough penalties will also be introduced for such behaviour which, from January 2016, will be classed as a criminal offence.

Secondly, it will become illegal to purchase alcohol from unregistered wholesalers. Retailers and foodservice operators will be able to check the legitimacy of the businesses they trade with by having online access to the registration details of each wholesaler. Any retailer purchasing from an unregistered wholesaler will also be liable to penalties.

  1. The application process in detail – which wholesalers will the scheme affect?

The Alcohol Wholesaler Registration scheme will apply to wholesalers of alcohol at the point which exercise duty has become payable. Furthermore, all businesses which trade in or retail in alcohol have a duty to ensure the wholesalers they buy from are registered with HMRC.

Businesses affected include the following:

  • Alcohol wholesalers
  • Brokers
  • Auctioneers
  • Retailers who sell alcohol

What Alcohol Wholesalers need to do:
All alcohol wholesalers will have to submit an AWRS application between January 1st and March 31st 2016. A wholesaler who begins trading in alcohol after this date must apply for registration at least 45 days before they wish to start trading. To legally begin trading, wholesalers must wait until HMRC have affirmed their ‘fit and proper’ status.

Once registration closes, HMRC will begin determining the ‘fit and proper’ status of applicants. Criteria for this will include the following;

  • 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 HMRC 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 has 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 unauthorized
  • The business has provided sufficient evidence of its commercial viability and, or, its 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

HMRC will also check that each wholesaler has good standards of record keeping and safeguards to prevent illicit alcohol reaching their depots.



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