Select Committee on Scottish Affairs Minutes of Evidence


Letter to Chairman of the Committee from Secretary of State for Scotland

  I said that I would update the committee about the latest position on the introduction of duty stamps to help tackle spirits fraud.

  Final decisions on the duty-stamping scheme were announced at the 2005 budget. With full implementation of the scheme planned for 2006. I understand that there has been excellent co-operation and constructive discussions between industry and Government which have led to mutually acceptable proposals and will hopefully ensure the timely introduction of the scheme. This dialogue had led to some important changes to the original scheme. The scheme will now adopt the industry's proposal to allow stamps to be incorporated into product labels and provide the added flexibility of a freestanding self-adhesive stamp rather than the use of traditional strip stamps. The scheme has also now removed the requirement for the upfront payment of Excise duty before stamps can be obtained and the tracking and tracing of products through the supply chain.

  Overall this has significantly reduced the estimated compliance costs of the scheme. Under the initial proposals the industry had estimated compliance costs to be around £23 million capital and £54 million ongoing under the new proposals these figures have been reduced to £5.5 million capital and less than £4 million ongoing. The Government has also made £3 million capital grants fund available to offset the capital costs of smaller businesses.

  Indicating the excellent working relationship that has emerged, the Scotch Whisky Association and HM Revenue and Customs have signed a "Memorandum of Understanding" which is an important testament to their positive and constructive working relationship. The MoU will be mutually beneficial, helping to create an environment where committing fraud will become increasingly difficult and legitimate trade can flourish. For your information I have enclosed a copy of the MoU. [12]

  HMRC began accepting applications for duty stamps registration from 3 October 2005. Once industry is registered they will be able to acquire stamps from a single HMRC appointed contractor, for application to their products from early 2006.

Alistair Darling

11 November 2005





12   Not published. Back


 
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