Excise duty

AWRS – alcohol wholesalers must now be approved by HMRC

Drinks wholesalers need to get their skates on to register for the government’s Alcohol Wholesaler Registration Scheme– or risk being unable to trade.

What is AWRS?

The Alcohol Wholesaler Registration Scheme (AWRS) is the government’s attempt to combat excise duty fraud, which costs UK taxpayers an estimated £1.3 billion each year. It will affect more than 20,000 UK businesses and may put many at risk of closure. 

AWRS requires any business involved in the wholesale of alcohol – either after or at the point at which excise duty is payable – to register with HM Revenue & Customs before the end of March 2016. HMRC will then assess the applicant and determine whether they are ‘fit and proper’ to continue trading.

From 1 January 2016 it has been an offence to wholesale alcohol without registering for AWRS. Penalties for wholesalers trading without having submitted applications will start from 1 April 2016. From April 2017, it will be an offence to purchase alcohol from an unregistered trader. So how do you register, and more importantly how do you ensure you receive approval?

AWRS application steps

Obtaining HMRC approval may not be as straightforward as you might first think. A significant portion of all applications will be rejected at the first stage.

HMRC will need to be sure that the applicant can show that it is ‘above board’, as well as having appropriate due diligence procedures in place to combat excise duty fraud. It will look into all aspects of the applicant’s business and will seek evidence to support the application. It will use the ‘fit and proper’ criteria as a measurement and will need you to prove that you have not knowingly or unknowingly become involved in any illicit supply chains, and that individuals in key positions within the organisation have no prior history of illicit trading or fraud.

AWRS due diligence

Additionally you will need to ensure that your due diligence procedures are robust enough and clearly documented – for many businesses this will be in the form of an internal guidance manual / standard company procedure document, which all employees must be aware of and follow.

It won’t be enough to say that you have due diligence procedures; you’ll need clear and documented evidence of them being used in practice. By demonstrating effective due diligence procedures as well as effective record keeping, you will have a much higher chance of success than if you were to simply log on to the HMRC application website and fill in the form with little thought or preparation.

It is advisable to assess the integrity of your existing due diligence procedures, identify any weaknesses and document your policies to ensure you have the best chance of persuading HMRC that you are fit for registration.

Where to register

Registration has opened and can be accessed via HMRC’s online gateway. The registration process itself is relatively straightforward but the amount of preparation and evidence required to support your application may catch out many legitimate businesses.

Failure to do something about AWRS sooner rather than later puts your ability to trade at risk. If you would like to discuss how this could affect your business and what you can do to minimise the impact and ensure a successful application, please contact your regular Grant Thornton adviser.

Alternatively you can speak to: Steven McGrady (steven.p.mcgrady@uk.gt.com), Ian Worth (ian.worth@uk.gt.com) or Alex Sinclair (alex.j.sinclair@uk.gt.com).