Avoiding alcohol duty fraud

This week, the ACS is launching a comprehensive new guide for retailers on how to avoid selling non duty paid products. Alcohol duty fraud is a serious problem for the convenience sector - HM Revenue and Customs estimates that retailers are losing up to 14% of the UK beer market to the illicit trade, and in 2012 alone alcohol duty fraud was estimated to cost the taxpayer over £1.2bn.

Despite the widespread nature of the issue, the penalties for engaging in the sale of non-duty paid products are severe. The most common way that duty fraud is enforced against is under powers given to HMRC to recover duty from anyone caught with excise goods which have not had duty paid on them previously. In addition to the goods being seized, the person holding those goods is liable for the duty and in some circumstances will also be issued a penalty which can total up to 100% of the duty which is due.

For the more serious offence of ‘smuggling’ (deliberate evasion of duty payable on goods), anyone involved runs the risk of criminal prosecution. If convicted, offenders could face unlimited fines or a jail term of up to seven years.

Being able to spot non-duty paid products is an important part of running a convenience store business. As a general rule, if you have any concerns about the legitimacy of a product, do not sell it, and contact trading standards. The easiest way to check is the legitimacy of the duty stamp on a bottle of spirits, and while there is no requirement for duty stamps on beer or wine there are a number of warning signs which will alert you to a possible illegal product.

The first is price – as the saying goes, if it seems too good to be true then it probably is. Don’t get caught up with the idea of a bargain, as it is likely to cost you a lot more in the long term. The second is the supplier. Only purchase from the major wholesale companies or wholesalers that you know, and if you are buying alcohol from an unfamiliar source, you should ensure that the supplier provides the correct paperwork to ensure that duty has been paid.

If you have any suspicions about products that you believe have been non-duty paid, contact the Customs Hotline on 0800 595 000 or consult our guide at www.acs.org.uk/dutyfraud.