Distillers secure 90 days of excise-free storage
A successful legal battle means UK distillers will be able to store finished goods in warehouses without paying excise duty for at least 90 days.
UK-based Downton Distillery led a litigation against Her Majesty’s Revenue and Customs (HMRC) to remove ‘restrictive’ time constraints.
Previously, HMRC’s policy for trade facility excise warehouses limited the time that finished products could be stored in duty suspension, with some only allowed for 30 days from receipt of materials.
The 90-day limit can also be extended at HMRC’s discretion.
Alan Powell, an excise specialist and founder of the British Distillers Alliance, who represented Downton Distillery, commented: “The restrictive ‘dwell time’ policy was applied wildly inconsistently by HMRC and caused cash-flow and production headaches.
“Although Downton was the lead case, in reaching the settlement, the policy change took wider effect in June 2022 by HMRC making the necessary changes to their Notice 196 to expressly remove the dwell time restriction, meaning everybody benefits.”
Downton Distillery produces Explorers’ Gin.
Hugh Anderson, owner of Downton, added: “I want to thank Alan for his tireless work to remove these restrictions entirely because it has not been an easy journey and our correct approval letter was not received until the end of last month.
“It was clear that not everyone had been treated in the same manner by HMRC and caveats were often added that caused distilleries to spend unnecessary money when budgets were tight.
“Evidently, different teams within HMRC apply their practices independently and without a uniform, rational or fair approach.”
The extension has been welcomed across the distilling industry.
Kathy Caton, founder and managing director of Brighton Gin, said: “Getting this ‘dwell time’ standardised across the board will really help us, as we can now steadily build our stocks up over the year for key trading periods without the worry of suddenly needing to make a big duty payment.”
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