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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