Small Producer Relief rate clarification
As part of the change from Small Brewers Relief to Small Producers Relief, HMRC seemed to announce a transition scheme that would mean beer produced before the 1st of August 2023 that qualified for Small Brewers Relief would be paid at the rate that applied at the time it was produced. So, rather than paying the rate that applied at the point the beer left duty suspense, it would instead be paid at the rate that applied at the point it was produced. You can read our update from the time here: UK duty updates August 2023ο»Ώ.
Then, two weeks later (and after we had built the transition scheme into Breww), HMRC scrapped it so that all SBR-qualifying beer would be paid at the rate that applied on the date of dispatch. You can read the follow-up update from the time here: UK duty updates August 2023ο»Ώ.
However, on seeking clarity on this from HMRC, it transpired that what the industry believed to be a change to the rules for the purposes of moving from Small Brewers Relief to Small Producers Relief, was actually HMRC's rule the entire time. Rather than scrapping the scheme, they had actually implemented an exemption to their normal rules.
This means that going forward, HMRC's rules are that all Small Producer Relief beer (and any other alcoholic drink) needs to be paid at the rate that applied at the point it was produced, not the rate that applied at the point it was dispatched.
This will only start having a practical effect from the 1st of February 2024, when your rate under the new alcohol duty rules will likely change for the first time due to your production totals from the previous year.
We have already built this into Breww, so if you are using Breww to calculate your duty returns, you have nothing to worry about.
If you don't use Breww, you will need to handle the complexities of tracking not just how much you've dispatched but also when exactly you produced what was dispatched. Fortunately, when importing your stock into Breww, you can provide us with its production date so Breww can immediately solve this admin nightmare for you. Book a demo here.
The online EX46 Beer duty return only lets me add one rate per duty band, and now I'll have two rates to submit until I've sold all beer produced before the 1st of February. How is this handled by Breww?
We raised this with HMRC when we first learned of this change. They've acknowledged the problem and have informed us that they will be updating the online EX46 to allow submitting multiple rates per duty band (e.g. two rates for the Draught between 3.5% and 8.4% ABV with SPR band).
Any beer that was produced before the 1st of August 2023 will be treated as if it was produced on the 1st of August 2023.
To determine when beer was produced, Breww will use the Date & time of the Racking on-site action if it's packaged on-site and the Date & time of the Racking off-site sent action if it's packaged off-site.
For Stock adjustment actions, the Date & time done of the action more accurately reflects when the additional stock was found rather than produced. Because of this, Breww will follow the following logic to determine when Stock adjustment actions were produced:
- Were any products using the same beer and container type packaged on this batch? If so, use the Date & time done of the latest matching action. For example, a stock adjustment for the product Floral Haze IPA - 330ml Can was made on the 1st of February. On the same batch, a Racking on-site action for a Floral Haze IPA - 24 x 330ml Can was made on the 1st of January. Because this was a packaging for the same beer (Floral Haze IPA) and container type (330ml Can) and was not a stock adjustment, Breww will use the Date & time done of this action instead.
- If no matching actions were found, Breww will look at the latest Date & time done anything was packaged (not including stock adjustments) and use that.
- If nothing has ever been packaged, Breww will use either the batch's completion date or the stock adjustment's Date & time done, whichever is earliest.
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