Supplementary memorandum submitted by
the British Beer and Pub Association
The Trade Association representing 98% of the
UK brewing industry and interests of owners and operators of over
35,000 public houses throughout the UK. The BBPA welcomes this
inquiry; since duty fraud is damaging the beer market as well
as the revenue stream.
BBPA PROPOSALS ON
MODERNISATION AND
SIMPLIFICATION
1. The BBPA has been attempting to engage
HMCE in a joint approach on the modernisation of the alcoholic
drinks production industry for several years. The industry believes
that the implementation of their proposals would be of benefit
to both HMCE and the trade. Modernising and simplifying would
reduce compliance costs to the trade and give greater duty assurance
to HMCE and hence reduce fraud.
2. The modern brewing industry has evolved
in a manner and speed such that legislation struggles to keep
pace. The outcome has been that the current legislation places
too onerous a burden on the industry in compliance costs, as well
as making it difficult and expensive to quickly respond to marketing
opportunities.
3. In addition, the Government and HMCE's
response to fraud, particularly in the spirits sector, is a concern
to the brewers. Regardless of the absolute level of spirits fraud,
all parties accept that beer fraud is significantly lower. However,
brewers would not want to see those measures currently being introduced
in the spirits sector being adopted for beer if there were displacement
in fraudulent activity away from spirits. Nor would we wish to
see tax stamps introduced for reasons of "consistency"
of treatment within the alcohols sector.
4. Some of the BBPA proposals have already
been incorporated into HM Customs & Excise own thinking on
modernisation. However, the industry's ideas go much further than
those of HMCE, whose main driver is "e" enablement and
the unification of the alcohol, tobacco and hydrocarbon industries
under a single umbrella of the Customs and Excise Management Act.
5. The BBPA's main proposals are:
(i) Registration of multiple site operations
producing a variety of tax type drinks, with a single registration
as an alcohol drinks manufacturer.
A prerequisite for this would be the appointment
by each company of a duty specialist trained to an approved standard.
This approach would also allow the removal of HMCE's current interpretation
of adjacent premises as those within a 5km radius. Instead, adjacent
would be determined by functionality.
(ii) Robust risk analysis of duty-suspended
movements. The BBPA contends that movements between different
sites within the same company ownership present minimal risk to
the revenue.
Financial security to be provided on all duty-suspended
movements, excluding those within companies' own sites within
the UK.
It would be compulsory for all independent hauliers
to hold a movement guarantee.
(iii) Non-intra company duty suspended movements
would be pre-advised to HMCE electronically, this to include the
duty liability associated with the consignment.
All such movements would have to be verified
against the SEED database and authorised. If necessary the system
would require the consignee to verify that they were expecting
the consignment.
The consignee would be required to confirm receipt
in the system and the duty liability would be automatically transferred.
All of this functionality would be based on the
requirements of the European Electronics Control and Movements
System.
(iv) Numerous other changes around method
of reporting and payment of duty, including agreed reporting periods.
6. The BBPA believes that that electronic
notification and approval of non-intra company duty-suspended
movements would significantly reduce fraud.
December 2004
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