Since 1 August 2023, there has been a period of temporary wine duty easement following the introduction of the new Alcohol Duty system. This period ends on 31 January 2025. In this blog, we take a look at what will change when the wine duty easement period ends, and how Bevica’s duty management system will help wine producers and importers improve the management of changing duty obligations.
What happened during the wine temporary duty easement period?
The 2023 Finance Bill came into effect on 1 August 2023 and, as a result, a new alcohol duty system was introduced by the HMRC. The purpose of this new duty system was to introduce a system whereby all alcoholic products would be taxed by strength (i.e. the higher the alcoholic strength, the greater the duty).
However, to help wine producers and importers manage the transition to the new method of calculating the duty owed on their products, it was decided that there would be an 18-month period of easement. During this period (1 August 2023 to 31 January 2025) all wine of an alcoholic strength of at least 11.5% but not exceeding 14.5% would be treated, for the purposes of the charge of alcohol duty, as if it were of an alcoholic strength of 12.5%.
What will happen to wine duty when the easement ends?
As of the 1 February 2025, the special flat rate for all wines between 11.5% and 14.5% ABV will come to an end and, going forward, duty on these wines will then be calculated according their specific % ABV. It is therefore very important that all wine importers and distributers know the exact % ABV of the wine products they sell and record this in their business management system. This is to ensure that they pay the right amount of duty on every product.
How can Bevica help wine businesses manage their duty obligations?
The beauty of the Bevica system is that its duty management functionality has the built-in capability to calculate duty amounts in both the old system of duty per hectolitre (hL) of alcohol and the new duty system of litres per % ABV.
As a result, the Bevica system did not need to have its functionality updated when the new Alcohol Duty System came into being last year, and will not need to be updated when the duty easement ends on 31 January 2025.
What current clients need to do at the end of duty easement is ensure that the % ABV is accurate for all their alcoholic products in the Bevica system. Wine products that are 11.5-14.5% ABV will then need to have their duty code changed to the HMRC duty code that covers “wine at least 8.5% but not exceeding 22% ABV”. Once completed, the Bevica system will automatically calculate the business’s new duty obligations going forward.
For new clients coming to the Bevica system after 1 February 2025, the set up for dutiable products is very simple. As long as all your data includes the information about every product’s duty status (duty controlled or not), % ABV, unit volume and duty code, Bevica’s duty management features will automatically do the rest with regard to duty calculation and accrual.
Want to find out more?
Developed over the last 20 years and powered by Microsoft Dynamics 365 Business Central, Bevica is a powerful best practice software solution designed specifically for drinks industry businesses. For more information about the Bevica duty management capabilities and much more, book a demo with us.
